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American society is extremely litigious. Lawyers love it because it makes them rich! Since you probably cannot change this fact, it will be helpful to protect yourself from legal action.

Please note. I am not a lawyer. All my comments are based on my own personal experiences over the last 30+ years. My experiences are not the same as yours. Please contact your own legal professional when making decisions that can affect you legally.

Whether you are about to start a business or have been operating as a sole proprietor or a partnership, you probably want to know: How do I know if I need an LLC?

When choosing the form of your business, numerous considerations come into play, including personal liability, ownership, and management, cost of forming and registering the business, and taxation. Reasons you might want an LLC include:

• Limiting your personal liability for business debts. With an LLC, only the assets owned in the name of the LLC are subject to the claims of business creditors, including lawsuits against the business. The personal assets of the LLC members cannot be claimed to satisfy business debts. For most people, this is the most important reason to form an LLC.
• Raising capital from investors. This can be done by bringing in other members who contribute funds, property, or services to the business.
• Tax advantages. There is usually no separate tax levied on the LLC itself, as there may be with a corporation. LLC profits or losses are generally passed on to the members, as they would be with a partnership.

You should also compare your state's fees associated with both LLCs and corporations, to see if one or the other is less expensive to form and maintain. Also, you should consider what your state requires in the way of holding meetings of the members, and annual reporting.

For more information and legal help, contact Legal Zoom.