The Single Member LLC is now permitted in every state in the United States. There are several reasons for a sole owner to start a single owner llc.
1. Personal Liability Protection. The single owner llc is the easiest and most effective way for a solo entrepreneur to safeguard his home and savings from business issues. Because of the ease of formation, this can be accomplished without complication.
2. Tax Benefits. The IRS passed laws in 1997 that generally allows a single owner llc to choose how it wants to be taxed including allowing the business to be taxed as if the limited liability company did not exist. This is a huge advantage because you do not have to subject yourself to tax complexity or double taxation in order to get protection.
3. Ease of Governance. The state legislatures recognized the need to not bury the small business owner with onerous and complex operational procedures. So every LLC is easy to manage but it is even easier for the single owner llc which does not require as many checks and balances. It is recommended that you have a llc operating agreement for single member just to evidence the existence of your single owner llc which helps preserve your protections.
4. Formal Vehicle. This age we live in is unfortunately overflowing with schemes to victimize customers. By starting a single owner llc for your business, you separate your company from the others because an official legal entity such as a limited liability company evidences a more serious business. After all, fraudulent people do not choose to have dealings with state governments and government filings are required to form a single owner llc.
A single owner llc is fairly straightforward to form but it should be done correctly. There are inexpensive services to create an LLC out there such as The LLC Expert.com who can do this for you fast and properly. Also, in order to make sure you do not lose the benefits of a single owner llc make sure you have the minimum paperwork in place such as the single member LLC operating agreement and that you always do business officially as your LLC and not in your personal capacity.