Having an LLC offers the best of a partnership and a corporation, and none of the bad parts of either. It usually is the best structure for the average entrepreneur and is something that you should consider if you are an entrepreneur. There are many benefits to setting up your company as an LLC.

Following are just five of the many reasons why a limited liability company could right for your situation:

1. Personal liability protection – Probably the most persuasive reason to LLC formation is to benefit from the personal liability protection provided by an LLC that is correctly setup. As an entrepreneur, you are exposed to a greater risk of lawsuit then you would be otherwise, so you can use an LLC to protect you personally from a lawsuit brought against your company.

2. Tax choices – As a sole proprietor, there are very minimal ways to deal with your business taxes. An LLC gives you several separate ways to handle your income taxes, which often times offers savings over what a company with no structure has available.

3. Customer trust – Let’s face it, as a business owner you most likely are going up against many other businesses. Your potential clients need to see you as a authentic business, and operating as an LLC allows customers to trust you.

4. Operational simplicity – Creating a corporation is another way to get specific personal liability and personal liability benefits, but they are generally more difficult in their operation. A corporation has annual reporting requirements that limited liability companies don’t, giving the LLC an advantage to its ease of operation.

5. Low cost – If you take advantage of a web based incorporation service company, it will not cost you a lot to start your LLC. In most cases there are no annual costs associate with a limited liability company, which makes them that much more cost effective.

Forming a LLC is a great decision for the typical small business, and allows you to have many of the benefits that are not available as a sole proprietorship. If you want to be a committed entrepreneur, then you really need to see if a limited liability company is the best pick for your situation, and it most likely will be.