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Why small business owners should establish a business entity

While it is great to have your own small business in Alabama, the decision comes with plenty to think about. For instance, do you know what kind of business structure works best for your particular operation?

The Week offers some guidance on the matter. Understand why a limited liability company could make for the ideal structure option for you and your new small business.

Liability protection

One of the best things about an LLC is the liability protection it offers. You have a buffer zone between your assets and your company’s debts. If you were to opt for a sole proprietorship rather than an LLC, then your personal assets become fair game should you ever fall behind on paying your business debts; the same applies should you ever face litigation.

Tax structure 

Do yourself a favor and go ahead and sit down with a business accountant to understand how taxes work with your small business. Another advantage of an LLC is that you can file separate tax documents that do not cross paths with your personal tax documents. This level of flexibility can work to your benefit when tax season rolls around.

Professional help 

Because some federal and state acts come with deductions designed to make life easier for small business owners, it is best to work with an accountant and financial adviser while operating your business. That way, you are always aware of such current (and future) state and federal laws that can build your business and allow you to retain more of your profits.


To make the most of an LLC, you have to be sure you apply for one the right way. That means filing all necessary paperwork with Alabama’s Secretary of State. Such documents include an operating agreement and articles of organization. Look into how much you can expect to pay in filing fees and taxes.

Do you feel that an LLC business entity makes for a sound decision for your commercial venture? During the course of operating your business, rely on the expertise of legal and financial professionals who can help your organization reach its full potential.