Summary
We explain five misconceptions about Missouri LLCs.
Forming a business is both exhilarating and filled with stress. You have a great idea, but how do you turn it into a profitable company? One thing you can’t overlook is what type of business structure you need when forming your business.
You do have a few options when you start your company. Although some people choose to create a corporation or a partnership, the most popular option is to form a limited liability company (LLC). This blog will focus on five common misconceptions about Missouri LLCs. Our law firm can help you navigate forming a limited liability company in Missouri because we have experience in these kinds of filings.
1) LLCs are Only for Small Businesses
You might assume that LLCs suit only small businesses. However, large companies and enterprises frequently choose the LLC structure.
The reason why large companies may go with an LLC is that the structure offers flexibility in how the company is managed and taxed. Even complex organizations can design a structure that supports growth and strategic goals. Large corporations can also create LLCs for specific divisions or projects as subsidiaries when trying to plan for expenses and revenue.
A Missouri LLC provides a way to protect owners’ personal assets from being seized if someone sues the business for damages. Large companies may opt for LLCs when expanding into new markets or launching high-risk ventures as a way to protect assets in other divisions.
2) All LLCs Are Taxed the Same
Many believe all Missouri LLCs follow the same tax rules. However, your company might miss the flexibility that LLCs provide. LLCs allow owners to choose between various tax classifications, including partnerships, sole proprietorships, and S corporations. This range of options lets business owners maximize financial benefits based on income and goals.
A business law attorney can provide legal guidance when filing the necessary paperwork for forming your Missouri LLC.
3) LLCs Don’t Require Formalities Like Corporations
While Missouri LLCs require fewer formalities than corporations, they still need to have articles of organization and various company structures laid out in an operating agreement when forming the company. However, they do not require an annual filing or formal annual meetings like with a corporation. An LLC risks losing the legal protections offered by this structure if it operates under multiple names and does not follow the correct filing requirements.
4) Forming a Missouri LLC Protects the Business Name Nationally
This is only true on the state level. Once you file your Missouri LLC, no one else can use that company name to do business. If you want to protect your name everywhere else in the United States, consider registering your company name and branding as a trademark, which we can help with to make sure the trademark filing with the U.S. Patent & Trademark office goes smoothly.
5) All Missouri LLCs Must Have Multiple Members
Many people mistakenly believe that LLCs require multiple members, but single-member LLCs are entirely legal and widely used. We might recommend entrepreneurs and sole proprietors choose a single-member LLC for liability protection and to maintain a simple business structure.
As your company business grows, the LLC structure allows the addition of new members if needed, making it adaptable to evolving business needs without altering its core legal structure.
Contact Our Experienced Attorneys for Legal Advice on Forming a Missouri LLC
Our attorneys have helped many business owners determine what legal structure to use when starting a business. Contact us or call (417) 887-4170 to schedule a consultation. We can help build a solid legal foundation for your company.