A Major LLC Advantage: Flexibility

A key benefit to LLC's, or limited liability companies, is the flexibility that they offer to those looking to start a business.

In many states, laws permit LLCs to be organized and operated according to the way the organizers wish the company to be organized and operated, including which and how many corporate characteristics they want, how they want their company's tax structure, and what rules and regulations, if any, they want to follow in the operation of the business.

While most states have default provisions written into LLC laws, business owners often have the option of modifying those provisions via their company's operating agreement. (Typical language goes like this: "Unless otherwise provided in an operating agreement...") Therefore, unlike corporations which are subject to many restrictions and provisions that cannot be modified, or other types of business forms that have automatic boundaries, the LLC advantage is that it provides the broadest range of options to pick and choose the way a business is to be set up and managed.

How do you obtain this LLC advantage? Most of the time, business owners will consult with an attorney to ensure that a proper operating agreement is drafted, in order to benefit from the myriad of options that the laws offer and to ensure the maximum personal protection the law provides. While there are many "sample" operating agreements floating around on the internet, this does not replace a consultation and thorough understanding by the business owner of their options. Saving a little money now could mean losing a lot of money and time down the road. A properly written operating agreement serves as an extra layer of protection for business owners and their companies.