It is a wonderful idea to start your own new business. Business ownership is not only a wonderful way for you to provide something valuable to this world, but it is an avenue to financial independence and extra income.

However, starting any new Missouri business is not without risks. One method for significantly reducing those risks to you personally is to form a Missouri LLC as the operating entity for your venture.

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.

CREATE AN LLC IN MISSOURI FOR PERSONAL LIABILITY PROTECTION

The MO LLC is first and foremost about protection. If you run a business without the benefit of a limited liability entity, you are a sole proprietor. A Sole proprietor business places everything that an owner owns or much acquire later at risk for loss due to business liability and problems. Given the current lawsuit epidemic, this 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.

Each time you connect or do a transaction with another party, the chances of a possible problem arising from that interaction arises. This is what creates potential for liability. Before the MO LLC was created in Missouri, most small business entrepreneurs took on the risk of liability because the costs and complexity of starting a corporation was too high.

This changed when Missouri lawmakers enacted the Missouri Limited Liability Company Act. Now, if you create an LLC in Missouri, the law protects your from being personally liable for the liabilities of the business just because you are an owner.

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 AN EASY TO MAINTAIN AND FLEXIBLE OPERATIONAL VEHICLE

Unlike a corporation, owners of a Missouri LLC are not subjected to unnecessary or complex legal compliance matters. As a result, the MO LLC does not have associated with it, the kind of legal mandates that come with a corporation. With a MO LLC, there is no required board of directors and members are not legally obligated to hold annual meetings.

Now, another benefit is that if a business requires some complex structuring to accommodate business ownership or other goals, the Missouri limited liability company is allowed to create its own ownership and management structure as it sees fit.

As a result, owners and managers are able to run their operations as they determine is most effective. And, they can change such rules and processes as their businesses grow and may become more complicated.

LOW REGISTRATION FEES

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.

ADDITIONAL FEATURES OF A MO LLC

An LLC in Missouri also offers business owners with other features that can help when starting a Missouri business. First, it is an official legal entity and it has been proven that customers and the public prefer to do business with legal entity businesses as they convey more credibility and trust.

Also, the Internal Revenue Service favors the Missouri LLC and gives it the most options for taxation. An LLC in Missouri automatically qualifies for pass through taxation which means income is passed through to owners and is not taxed at the LLC level. This is preferred by most any small business because they are able to avoid the double tax of C corporations.

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.

Tags: Small Businesses