As an Idaho business owner, you are always on the lookout for ways to help improve your business, whether in terms of efficiency, profit margins, or liability.
Did you know that changing your business structure can help with all three of these substantial benefits?
At Generations Law Group, our business law team is ready to help you make any changes to your business that you see fit. Contact us now so we can discuss the specifics of restructuring your business.
How Can Changing My Business Structure Help My Business?
Changing the structure of your business may seem like a hassle that only serves to make things more difficult for you.
However, in reality, a new business structure can cause significant benefits to your business operations, as well as your stress levels.
A new business structure can help optimize your profit margins and your efficiency and minimize how liable you are for your company’s debts and liabilities – if you are liable at all.
Read on to take a closer look at the four reasons you should consider changing your business structure.
1. Protecting You From Liability
One of the most sizable benefits of changing your business structure is to protect yourself from liability and protect your assets from any penalties that debts or lawsuits may incur.
By changing your business to a Limited Liability Company, (commonly known as an LLC), you negate how responsible you as an individual are for liabilities incurred against the company.
With an LLC, you successfully protect yourself from debt or lawsuits that may affect your business and secure any of your personal or business assets.
2. Your Company’s Rate Of Growth
Aside from considering the liabilities of yourself and your company, it is vital to consider the growth rate of your company.
If your company faces only a few hazardous operations, then you may be fine with a sole proprietorship or similar business structure.
However, if your business has grown exponentially, you may opt to alternate to a business structure more conducive to your increased operations and, therefore, your increased liability.
Larger businesses may fare best as limited liability companies or as a corporation.
3. Help Obtain Financing Via Bank Loans
Getting a bank loan is never as easy as we’d like it to be. These financial organizations can have a lot of obstacles in the way for business owners and other loan applicants.
However, changing your business structure is a great tactic to help secure financial backing for your company from a bank or another lending company.
Banks and investors are drawn toward businesses with a complex and risk-minimizing structure, such as a corporation or limited liability company.
4. A New Tax Method
If you are looking for a way to pay fewer taxes on your business, then changing your business structure may be exactly what you have been keeping an eye out for.
Under a 2017 tax cuts act, the IRS made particular business structures eligible for a significant tax cut.
According to these new acts, companies such as S corporations, sole proprietorships and partnerships, and certain LLC structures can receive up to a 20% discount on their income taxes.
Contact Generations Law Group To Help Make A Plan For Your Business
Here at Generations Law Group, we are ready to help you make a plan for the future of your business – whether that involves changing its business structure or placing it in a trust for your family.
Contact us today for a strategy session. Our team of Boise-based business attorneys is here to help you go over anything you may need to change your business structure.