What is an LLC?
An LLC stands for “Limited Liability Company”. By definition a LLC is a legal entity having one or more individuals or entitles that come together to do business. The “owners” of the LLC are called “members”
How does an LLC protect you?
The member(s) of the LLC are limited in their personally liable for judgments, debts, obligations or liabilities of the LLC. This liability protection is one of the reasons why people decide to set up LLCs to run a business. The goal is to shelter your personal assets from any liability that may emerge from the business.
For example, John sets up an LLC to operate his dog grooming business. If John causes harm to a client’s dog that results in a lawsuit, John is limited to his membership interest in the liability. So John has segregated his personal assets from his business liability.
So, an LLC is a great asset protection tool, however some business are better suited for LLC structure whereas others are not. It is always best to consult with our office prior to deciding whether an LLC structure fits your business needs.
And of course your LLC has to be correctly established correctly. It is imperative that the LLC be established with the requisite legal requirements including a detailed operating agreement that provides the legal limitations to protect your personal assets.
So, if you are an individual with a business venture and you may be interested in forming an LLC, contact our office for a consultation. We can help you with your asset protection planning.
Feel free to contact our office for a free consultation to discuss your asset protection need and the establishment of an LLC.
