A limited liability corporation (LLC) is called that because its owners are not personally responsible for the debts of the company.
This structure differs from a general partnership or from a single owner, in which the company and its owners are legally equal. Under the laws for those business structures, any personal property asset can be used to pay debts incurred by the business.
This structure protects the assets of the owner, such as a house, a car, works of art or other valuables.
LLC owners pay taxes at the personal rate, rather than at the commercial rate; This is known as a "pass through".
An LLC, unlike a full-fledged corporation, is subject to fewer government regulations and annual reporting requirements.
The owners of an LLC can establish their business using the structure they desire. Owners can administer an LLC or appoint a manager. An LLC, unlike a corporation, does not have a board of directors that must approve corporate decisions, nor does an LLC have officers to handle day-to-day business.
The government imposes fewer restrictions on an LLC with respect to who can own one, or how many owners are allowed; this is a marked difference of a corporation S.
An LLC can claim a deduction from income tax for many more items than a corporation, such as pensions, medical expenses, commercial entertainment and travel. Because you can be both an owner and an employee of your own LLC, you do not have to file an Schedule C of the IRS.
Also, even if you are the only member of your LLC, you can deduct health, travel, transportation and entertainment expenses. You can also structure your pension plan so that the money you save for retirement is tax deductible.
This could be the best reason to choose to start your online business as an LLC.
LLC owners have more sources of financing than sole proprietors or general partnerships. Investors are more willing to put their money in LLCs because the owners are not personally responsible for the companies. Investors do not risk losing their own personal assets, as they would when investing in companies structured in another way.
An LLC can survive its owners.
An LLC can make promissory notes, issue its own bonds and obtain secured or unsecured loans, for any legal reason.
An LLC can issue shares.
An LLC can make donations to charities.
What is Drop shipping
As you can see, there are many advantages in structuring your online business as an LLC. My advice to you is to consult an experienced lawyer in your state to obtain the best information about the privileges and obligations involved in this business structure.
When you use direct shipping, a customer places an order for a product on your website and the manufacturer or distributor sends it. When you are starting an online business, you can choose to have your products shipped because their costs are reduced and the shipment is eliminated from its end.
For a new online business, the biggest benefit of direct shipping could be that you do not have to buy inventory. If your company does not do well and you decide to suspend it, you will not lose money on unsold products. The same goes for products that stop selling because they were fashionable, and the trend has passed.
You can also offer less popular products to smaller markets, in addition to the best sellers that you sell in large quantities.
When you choose direct shipping, you can offer your customers the latest products. You will not have to invest in manufacturing or risk buying something that you can not sell.
The shipping costs of your customers can also be lower with a direct shipping agreement than if you sent them yourself. As a small business owner, you will not have access to large discounts for shipping amount.
Because it eliminates the intermediary, fewer people manage their products. This decreases the incidence of damaged goods. Depending on the agreement that your business has online with the distributor or the manufacturer, you may have to pay for the shipping of the returned products.
The fewer damaged products, the less shipping costs you incur.
If your online business is a one-person operation, you will appreciate the fact that you do not have to pack and ship your products yourself. If your business grows, you will not have to hire staff to perform those tasks.
One real advantage of using a direct sender is that you do not have to store any inventory. If you do not have a warehouse, or even a garage that is large enough for your needs, you will need to rent a storage facility. Your inventory and the amount of different products you can offer will be limited by the amount of space you can rent.
You may have to give up selling large products because they only take up too much space. You can also choose not to sell anything fragile or perishable, as you simply can not store it properly.
When you are starting an online business, direct shipping may be the best option for you. Because manufacturers or distributors will put your company's label on the products they sell, they will present a professional image to their customers and give the impression that they have a large inventory at their fingertips.