Have you ever been told by an accountant, or anyone for that matter, you should only open an LLC if you have over a certain amount of money?
Well, I’m here to tell you that’s bogus. It might as well be malpractice.
I’m going to give you two basic points about having an LLCs and why they’re so crucial for your business.
If you’ve considered having any type of business whether it be a real estate, rental properties, franchise, or even network marketing, you should set up an LLC for two basic BollitProof reasons:
First from a tax Perspective – LLCs are critical.
No matter how much money you make in your business, whether it be $1,000 or $100,000, having an LLC allows you to avoid having to pay self-employment tax.
This is big because self-employment tax is 15.3% currently. So if you make $100,000 and don’t structure this properly, you’re looking at $15,300 you’ll owe. And that’s in addition to your normal tax bracket!
Setting up an LLC the right way – see this article – allows you to avoid that completely. If you can avoid paying thousands in taxes, why wouldn’t you?
The second BollitProof reason to set one up for your business has to do with protection.
Like it or not, we’re in a sue-happy world. It stinks, but you have to consider putting some things in place to keep people at a distance when you need to.
Let’s say you have an income stream that, on occasion, requires a client to come to your home. This is particularly common in a direct sales or network marketing business. One day the worst possible thing happens. While at your home, they slip, fall and decide to sue you.
Without an LLC in place, that person could sue you for everything you got. If you were able to create an LLC and protect yourself, they are limited to sue your LLC. Your personal property or income outside of the LLC is not at risk.
In fact, one of our BollitProof strategies teaches that if you have more than one business or multiple streams of income, you should have an LLC for each.
If you have one income stream might be a traditional business and the other income stream could be a network marketing or direct sales business, like our example from above.
Same scenario happens. They could sue and possibly take money from both companies if they are in the same LLC.
This is all totally avoidable by creating an LLC for each. That’s why we call it “One Asset, One LLC.”
This is very important to being in business and if your accountant thinks differently we encourage you to do your homework and decide for yourself after implementing the strategies BollitProof provides.