If you are thinking about starting a business of your own, you are on the right track to something very meaningful in your life. In addition to being a way to pursue something you really enjoy, you are also moving toward financial independence.
But, this path of entrepreneurship is not without risks as starting any business involves chances for liability and problems. The best way to reduce much of the risk to your personal assets is to create an LLC in Missouri for the business.
The Missouri Limited Liability Company Act is proof of a well thought through statute for encouraging and protecting business owners. The biggest benefit under this law is personal liability protection for owners but if you look at it more closely you will see other advantages as well.
AN LLC IN MISSOURI PROVIDES YOU WITH PERSONAL ASSET PROTECTION
A Missouri limited liability company gives the primary benefit of liability protection. If you run a business without the benefit of a limited liability entity, you are a sole proprietor. Sole proprietor businesses are very risky because everything that the owner owns or may acquire in the future can be lost due to business related problems and liabilities. It is a huge risk.
Any business requires that you interact with other persons or businesses. You may need to hire employees or retain contractors. Other examples include the need to deal with suppliers, banks, governments, professionals and other businesses.
Every time you conduct business activity with another party, it gives rise to a situation which may later result in a possible conflict or dispute. Before the MO LLC was offered in Missouri, many small business owners accepted this risk of liability because the costs and complexity of using a corporation was just too much to accept.
But, when the Missouri Limited Liability Company Act was passed, entrepreneurs finally received a workable solution. When you create an LLC in Missouri, this Act prevents you and other owners from being personally liable merely because you are owners. So, with this passage, there really is no need to run as a sole proprietor.
The success of the MO LLC is evident by looking at the number of formations that have taken place. The limited liability company is now the entity of choice for Missouri small business not only because of its protection but because of other attractive features.
AN LLC IN MISSOURI IS STRAIGHTFORWARD TO MAINTAIN AND OFFERS MAJOR OPERATIONAL FLEXIBILITY
The Missouri lawmakers also wanted to free up any burden on business owners with extraneous legal compliance matters. As a result, an LLC in Missouri is not required to meet many of the obligations imposed upon the MO corporation. A Missouri limited liability company is not required to have a board of directors or to hold annual member meetings.
On the other hand, an LLC does not have to have simple governance and reporting. If the needs of a particular company and its owners require some complexity when it comes to managing or structuring the rights and obligations of an owner, the Missouri LLC laws allow for most any type of structure to be adopted and implemented.
Basically, the way the LLC laws work allow a company to operate the way it wants or needs to be managed without having to fit into any irrelevant legal structures.
FILING AND REGISTRATION FEES ARE MINIMAL
Missouri has also agreed to keep filing and registration fees low for a MO LLC. Presently, the filing fee is $105 for a standard filing. As you can see, these costs are minimal compared to the huge protection benefits you get. You protect your home, savings and other things you own from being lost due to business ownership with just a few hundred dollars.
OTHER BENEFITS OF A MO LLC
When starting a business in Missouri, a Missouri LLC can help in other areas as well. For one, it provides an official and trustworthy image for your new business which makes getting customers easier. Customers view legal entity businesses as more credible and professional.
The LLC in Missouri also qualifies for the several tax structures including automatically qualifying for the favored single layer of taxation. Under this default structure, profits are passed through to the owners and taxed only once so this avoids the double tax consequences of the C corporation tax structure.
On the other hand, if a particular LLC business determines that it may save taxes under a corporate tax structure, the IRS allows for a MO LLC to elect to be taxed like a corporation. While the default single layer tax is the most beneficial to most small businesses, consult with your accountant if you think there may be a more advantageous tax structure for your Missouri limited liability company.
In summary, those who choose to create an LLC in Missouri are making a smart move that will not only allow their businesses to be more profitable and more successful but will provide more protection which reduces the risk of ever losing what you work so hard for due to potential business problems.
