Starting out in business, home-based business people usually start their company structure as either a Sole Proprietorship or Partnership. These structures can be started very easily and for very little cost. However, one of the big drawbacks to these structures involves the sharing of assets between you and your company. In Sole Proprietorships or Partnerships, the assets of company are legally joined with your personal assets. That means that in civil litigation situations, your personal property can be vulnerable to litigation settlements or judgments.
A better choice of business structure is the Limited Liability Company (LLC). In this structure, your company assets are partitioned from your personal assets. This structure costs more to form – filing fees vary from state to state, but they are generally several hundred dollars. However, the protection they yield is well worth it.
You can go through an agent to form your LLC. One such agent is The Company Corporation. If you don’t want to spend time on performing the filing yourself, they will do everything for you.
If you have already started out as a Sole Proprietorship or Partnership, the LLC formation might be something you should consider as your next step.