• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer

The Potter Law Firm

North Carolina and Kentucky Estate Planning Attorneys

phone iconNC (704) 944-3245
KY (606) 324-5516
Attend A Free Seminar - KY Attend A Free Webinar - NC/SC THIS IS AN ADVERTISEMENT

  • Home
  • About Us
    • About Our Firm
    • Attorney and Staff Profiles
  • Practice Areas
    • Asset Protection & Business Planning
    • Elder Law & Medicaid Services
    • Estate and Gift Tax Figures
    • Family-Owned Businesses & Farms
    • Incapacity Planning
    • IRA & Retirement Planning
    • Legacy Planning
    • Pet Planning
    • Probate
    • SECURE Act
    • Special Needs Planning
    • Trust Administration
  • Elder Law
    • Coping With Alzheimer’s
    • Emergency Medicaid & Nursing Home Planning
    • Guardianship & Conservatorship
    • Hospice Care
    • Medicaid Planning
    • Nursing Home Planning
    • Veterans Benefits
  • Communities We Serve
    • Kentucky
      • Boyd County
        • Ashland
        • Florence
      • Kenton County
        • Covington
        • Fort Mitchell
        • Independence
    • North Carolina
      • Mecklenburg County
        • Charlotte
        • Davidson
        • Huntersville
  • Resources
    • Definitions
    • DocuBank
    • Elder Law
      • Elder Law Links
      • Elder Law Reports
      • Local Elder Law Resources
        • Ashland Elder Resources
        • Covington Senior Resources
        • Huntersville Elder Law Resources
        • Independence Senior Resources
    • Elder Law Reports
    • Emergency Legal Documents
    • Free Estate Planning Seminars
    • Free Estate Planning Worksheet
    • Frequently Asked Questions
      • Estate Planning
      • Frequently Asked Questions for Families Without an Estate Plan
      • IRA & Retirement Planning
      • Legacy Wealth Planning
      • LGBTQ Estate Planning
      • Medicaid
      • Pet Planning
      • Trust Administration & Probate
    • Is Your Estate Plan Outdated?
    • Kentucky Probate Resources
      • Ashland, Kentucky Probate Resources
    • Newsletters
    • North Carolina Probate Resources
      • Huntersville, NC Probate Resources
    • Reports
      • Advanced Estate Planning
      • Basic Estate Planning
      • Elder Law Reports
      • Estate Planning for Niches
      • Trust Administration
  • Contact Us
  • BLOG
Home » taxes » Why Considering an LLC is a Good Idea

Why Considering an LLC is a Good Idea

July 7, 2017 by John Potter

LLCIf you are considering starting your own business or if you think you may need to change your business entity, you should think about a Limited Liability Company or LLC. There are a variety of business entities from which you can choose and each one has various benefits. Those benefits often involve protection from legal liability and tax consequences. Here are some of the reasons you should consider an LLC.

How does an LLC work?

One of the primary advantages of creating an LLC is the fact that it can limit the business owner’s liability by providing protection for personal assets.  In other words, your personal property is not subject to your legal obligations under the business. An LLC also provides a degree of protection for business assets, as well.

LLCs are usually established pursuant to state statute. LLCs are flexible because they allow business owners to allocate profits and losses in a manner that will take the best advantage of certain tax consequences. The owner of an LLC can choose to be taxed as a “pass-through” entity allowing the owner to avoid double taxation.

Avoiding personal liability for business debts

The primary goal of an LLC is to protect the personal assets of the owner from any liability imposed on the business. If properly established, LLCs can also provide additional protection for the business from certain types of legal claims. In spite of the potential protections that an LLC can provide, simply creating this type of business entity does not automatically provide protection. One key to avoiding personal liability is making sure that you do not personally guarantee any business debts with your personal assets. If you fail to do so, creditors who have claims against your business will be able to threaten your personal assets in order to satisfy their legitimate claims.

You can be protected against personal liability for third-party acts

Regardless of what type of business you have, the misconduct of third-parties can become an issue. This is especially true if their misconduct results in potential liability for you or your business.  With an LLC, it is the business itself that would be responsible for the negligence or wrongful actions of a co-owner or employee. That also means that only the assets of the LLC will be subject to any legal judgment. If on the other hand, the owner or employee is personally responsible for the wrongful acts, those individuals could still be held personally liable, in addition to the business.

An LLC does not allow you to avoid liability for your personal actions

Despite all of the legal protections that LLCs can provide, an individual owner cannot effectively “hide” behind the business entity. Liability for wrongful or negligent conduct related to the business, that causes someone to be injured during the course of business dealings, can still lead to legal responsibility for those injuries. The same is true for acts of fraud or criminal acts.

Maintaining liability insurance is still important

Even considering how great LLCs can be, a business owner should not rely solely on the entity to provide the necessary protection. The extent of protection from liability will depend on the laws in the state where the business was created. For that reason, it is always wise to maintain sufficient liability insurance coverage as well. That way, regardless of the situation, you have a better chance at being protected.

Owners of LLCs still need a business plan

The goals of most business plans, once the proper business entity has been chosen, are to reduce or eliminate tax liability as much as possible and plan for succession of the company to the right people. This is very similar to what an estate plan can provide for an individual. Businesses need the same type of planning in order to protect the business for successive generations.

The benefits of a business succession plan

A business succession plan can bring with it a smooth transition of business ownership to the next generation.  Specifically, you need to ensure a successful transfer of management if you want to avoid the risk that your business may not survive your retirement or death in the future.  A well-thought-out business succession plan is the easiest way to make that happen. Two of the most disregarded problems that prevent family-owned businesses from surviving retirement or death of the primary owner are inadequate tax planning and family disputes.  Luckily, both of these issues can be addressed with broad business succession planning.

Join us for a FREE seminar today! If you have questions regarding living trusts or any other estate planning needs, please contact The Potter Law Firm for a consultation, either online or by calling us at (704) 944-3245 (Charlotte, NC), (606) 324-5516 (Ashland, KY), or (859) 372-6655 (Florence, KY).

  • Author
  • Recent Posts
John Potter
Latest posts by John Potter (see all)
  • What You Need to Know about the Medicaid Look-Back Rule - January 3, 2023
  • How to Pass Down Your Legacy in Your Estate Plan - October 3, 2022
  • Practical Steps to Take after Receiving a Terminal Diagnosis - September 30, 2022

Filed Under: Business Law

Other Articles You May Find Useful

The Potter Law Firm
Business Succession Plan

Free Estate Planning Worksheet

There's a lot that goes into setting up a comprehensive estate plan, but with our FREE worksheet, you'll be one step closer to getting yourself and your family on the path to a secure and happy future.

Texting Permission

Follow Us

  • Facebook
  • Instagram
  • LinkedIn
  • RSS
  • Twitter
  • YouTube

Subscribe to Our Blog

  • This field is for validation purposes and should be left unchanged.

Testimonials

default image

Overall The Potter Firm was very professional. They took what could of been a very complicated process and were able to break it down so it was a lot easier to understand. We are confident we now have made the right decisions in our estate planning. Good firm to work with.

DKS & KMS Client Review August 28, 2020

default image

John Potter has been a real pleasure to work with. He is very knowledgeable and explains things in a very simplistic manner so the average person can understand how/why the laws are written. He is very attentive and asks questions in such a way that not only helps him understand your goals, but also helps you think about what type of goals and expectations you should be considering. Exemplary client service.

David J. Client Review August 28, 2020

default image

My husband and I selected Ms. Potter to assist with our small business. She responsive and attentive every time I have a question or need assistance, and is extremely knowledgeable and able to answer any legal question I have had. I know I can count on Ms. Potter for all of my business legal needs and I would highly recommend her to anyone needing legal assistance with such.

Jillian Client Review August 28, 2020

<< Prev
Next >>

Where We Are

Ashland

ASHLAND
1620 Carter Avenue
Ashland, KY 41101-7631
Phone: (606) 324-5516
Fax: (606) 324-4766

Charlotte

CHARLOTTE
15720 Brixham Hill Avenue
Suite 300,
Charlotte, NC 28277
Phone: (704) 944-3245

Huntersville

HUNTERSVILLE
11330 Vanstory Drive
Huntersville, NC 28078
Phone: (704) 944-3245

Northern Kentucky

NORTHERN KENTUCKY
7310 Turfway Road
Suite 550,
Florence, KY 41042
Phone: (859) 372-6655

Office Hours

Monday8:30 AM - 4:30 PM
Tuesday8:30 AM - 4:30 PM
Wednesday8:30 AM - 4:30 PM
Thursday8:30 AM - 4:30 PM
Friday8:30 AM - 3:00 PM

Map/Location

potter_sidbr_map
potter law logo
  • Facebook
  • Instagram
  • LinkedIn
  • RSS
  • Twitter
  • YouTube

The information on this website is for general information purposes only. Nothing on this or associated pages, documents, comments, answers, emails, or other communications should be taken as legal advice for any individual case or situation. The information on this website is not intended to create, and receipt or viewing of this information does not constitute, an attorney-client relationship.

Privacy Policy | Terms of Service | Disclaimer | Site Map | Powered by American Academy of Estate Planning Attorneys

© 2023 American Academy of Estate Planning Attorneys, Inc. THIS IS AN ADVERTISEMENT