How an Idaho LLC Could Help You With Your Small Business
By Lane V. Erickson, Idaho Business Attorney
For over 70 years the premier Idaho business attorneys at the Racine law office have met with and helped numerous business clients with all of their Idaho business needs. Often this includes helping clients create, organize, and then operate a limited liability company as part of their business structure. A limited liability company is more often known as an LLC. While most people have heard of an LLC they really don’t understand what it is or how it can help a person who is involved in a small business. The purpose of this article is to provide very basic information about how an Idaho LLC could help you with your small business.
At the Racine law office, we use a team approach when it comes to assisting our business clients meet all of their legal needs including setting up and operating an LLC. Our team of Idaho business lawyers includes partners Lane Erickson and TJ Budge, and attorneys Nate Palmer and Dave Bagley. Each of the attorneys on our team have earned the highest ratings possible from all legal ranking services including Martindale Hubbell, Justia, and AVVO. Our attorneys are knowledgeable and experienced in assisting clients meet their small business needs, including setting up and operating an LLC.
We regularly meet with small business owners and go over with them the advantages that an LLC could offer them. To help you in deciding whether an LLC could benefit you and your business, here are three specific things that you should know about how an LLC could help you with your Idaho business.1. It can Protect You From Personal Liability
The first way that an LLC can help you with your small business is that it provides the owners of the business protection from liability for any acts or debts of the LLC itself. An example to illustrate what this means may help. Suppose for a moment that you have a small business that owns investment real estate such as rental properties. Now let’s suppose that rather than putting the rental properties into an LLC you own them individually. If someone were to be injured by slipping and falling on the sidewalk to that property, the person who is injured would be able to have you be personally liable for any damage or injury they’ve sustained. As a result of this, if you are not adequately insured, that injured person could go after you personally and all your own assets to pay for any damages they sustained.
Now let’s change the facts a little bit and suppose that the rental property you own is actually placed in an LLC. If in this situation a person were to slip and fall and be injured, unless there was some intentional act that led to this injury, you and your personal assets would be protected from any liability that could arise. In other words, the worst case scenario is that the injured person could take away the assets within the LLC, but could not go outside of the LLC for any additional liability. As a result, you would personally be free from liability for this injury and your personal assets would be safe.
To be sure, there is a little more detail about how the LLC is operated, and about keeping good records within the LLC in order for it to maintain the corporate shield that offers you protection from liability. The purpose of this article is not to go into those details. If you are concerned about personal liability and operating a small business, you should consult a qualified Idaho business attorney who can answer your questions and help you determine whether an LLC would be a good choice for your small business.2. It can Help Control Who You are in Business With
The second way that using an LLC as part of your small businesses is a good idea is that it specifically controls who you are in business with. You may be thinking to yourself, “I get to choose who I’m going to be in business with myself and I don’t need an LLC to help me make that choice.” However, you may not be entirely right. Suppose for a moment that you are in partnership with an individual who is married. Now let’s suppose that your partner is either disabled, or has died. In this instance, the ownership interest of your partner now goes to their spouse. In other words, you may now be in business with your partner’s spouse who would have the same right of control, management, and decision-making as your partner previously did.
By using an LLC as part of your small business, you have the opportunity to create an operating agreement. This operating agreement would be signed by you and any other owners of the business. The operating agreement has the ability to provide specific language about what happens in the instance that one of the owners dies, becomes divorced, becomes disabled, or simply decides they want to sell their part of the business. Without getting into all the details, the operating agreement can control and limit the ability of a spouse or any other third-party from having any type of management control or voting rights over the operation of the business itself.3. It Could Provide You with Some Tax Advantages
An additional advantage provided by using an LLC as part of your small business is that the owners have the ability to elect how the LLC will be taxed. The LLC could be taxed as a sole proprietor, as a partnership, as an S corporation, or as a C corporation as long as it qualifies for these options.
With the tax reform that was put in place by President Trump, many businesses elect to be taxed at the corporate rate rather than at the individual rate. Many business owners find this to provide them with less taxes than would be paid if they were taxed individually. The members of our business team often work with the accountants of our clients to help determine the options available within the LLC organization that would be best for our clients and their small business operations.
We have helped numerous clients make the decision to use an LLC as part of their business structure. We have also helped many of our clients take advantage of the opportunities available through an LLC as part of their small business operation. If you have questions about how an LLC could help you, we are confident that we can answer your questions.Enlist an Idaho Business Attorney to Help You
Our team of Idaho lawyers can help you with any of your business structure or operation needs. Whether you are seeking to create a new business or review a current business, we are available to discuss your options and answer your questions at an initial consultation. Call us toll free at 877.232.6101 or 208.232.6101 for a consultation. You can also email us directly at firstname.lastname@example.org or stop by our office at 201 East Center Street, Pocatello, Idaho 83201. We will answer your questions and help you solve your Idaho business problems.