For those of you who take pride in your entrepreneurial strength, it is never too early to start thinking about how to parlay a great idea into a successful business venture. Author T. Harv Eker says, “For the rich, it’s not about getting more stuff. It’s about having the freedom to make almost any decision you want.” The bigger your vision, the better.

In today’s competitive job market, starting your own company has become an appealing career path for many. Being a young college student, the best way to get started is to form an LLC, short for limited liability company. You may think that words like these only apply to savvy wall street bankers. Fact of the matter is, LLC’s are not as complicated as they sound. Giving your business a legal structure is an important step in getting clients to take you seriously. Here is the blueprints behind what an LLC is and how it will benefit your self-started business.

GETTING STARTED

Begin by checking with your department of state in the location that you desire to do business. All that is required of you is to fill out all the necessary forms and pay a state fee to become registered. When forming an LLC, you have the option to do the paperwork yourself rather than hiring a firm to do it for you. If you are willing to take up more of your own time you may cut some corners with monetary costs. You have the ability to form your company on your own, or with a group of people.

An LLC is officially established as soon as the organization papers have been filed. You can sell ownership interests in an LLC to third parties without having to discontinue operations. If you plan to pass down the company to your son one day, there are few legal complications with this structure. If you were to suddenly die, your company would not necessarily have to as well. This ease of transfer will be especially convenient when the company grows. Essentially you are the business. As an owner, you individually have the power to transfer company assets and bank accounts.

PROTECTION

Some of the most obvious concerns with being a businessman are your legal and tax protection. This style of business is advantageous because it maintains a simple structure that still gives you the protections you given in a big corporation. For example, if someone were to sue you, it would be the actual company entity at stake. You will not be held responsible from an individual standpoint.

GETTING PAID

LLC’s are very useful when it comes to business taxes. The profit of the business is not subject to earned income taxes by its members. Essentially you are avoiding the double taxation here. Although your LLC is considered a separate legal entity, you will not have to pay the federal corporate taxes that come with it. Members are paid simply through profit distributions. Essentially you are not paying yourself a flat hourly wage, rather you write yourself checks when you need them.

If you feel that you are ready to take a business plan to the next level, creating an LLC offers you credibility, flexibility, and a simple manner in which to promote a business. The only question you really need to ask yourself is, How big do you want to be?