Stuart Gentle Publisher at Onrec

Why An LLC is A Good Option For A Staffing Business

You can use several legal structures for your staffing business, including sole proprietorship, partnerships, corporations, Limited Liability Company (LLC), and social enterprise. While each option has unique pros and cons, an LLC stands out because of its numerous advantages.

For one, it influences your growth and affects your legal liability. According to business laws, an LLC is classified as a separate entity from its owner. Thus, liabilities incurred by the business won’t roll over to the owners’ assets. With that in mind, here’s a deep dive into why an LLC is a good option for a staffing business:

  1. Fewer Corporate Formalities

Forming a business involves several steps and numerous legal requirements. The advantage of using the LLC structure to run your business is avoiding some administrative formalities. For instance, if you intend to start a corporation, you must have annual meetings with all shareholders, keep records, and pay yearly fees. That might not be the case with an LLC. This structure has fewer formalities than corporations. Besides the registration forms, you may only need to file articles of organization and operating agreement, and that’s it.

However, the particular steps of forming an LLC vary from state to state, and you must adhere to the laws where you plan to operate your business. Fortunately, some professional firms can assist you to quickly create LLC online and take the burden of trying to understand the requirements off your shoulders.

  1. Protection Of Personal Assets

For business structures like sole proprietorship and partnerships, the business owner is typically treated as one with business, meaning the business debt is the owner's responsibility. If the business gets sued for defaulting on loan payments, it puts the owner’s assets at risk—for instance, personal assets such as cars, houses, and land.   

However, for LLCs, things are different. The business acts as a separate legal entity. This way, the owner's assets are safe. If your business partner or the business itself can't repay its debts, then the owner's assets will not be touched to pay for the unpaid debts.

Thus, an LLC is an excellent option for your business if you intend to borrow money externally. While you might be confident enough that you’ll repay on time, the tables may turn at any time due to unseen internal or external forces, making you bankrupt. Thus, it’s wise to protect your assets through the LLC structure.

  1. You Enjoy Tax Benefits

The best thing you can do for any business is to reduce the tax burden. With an LLC, you enjoy several tax benefits. The structure allows you to have a pass-through tax structure. Simply put, when your business accrues profits or losses, it bears them. You only pay income tax from your returns as a business owner. Unlike other business structures, you’re not required to pay corporate tax. The advantage of the pass-through taxation model is that you have more savings since you’re not subjected to double taxation.

  1. Flexibility In Profit Distributions

The joy of adopting an LLC is that you can agree on how to share your profits. Unlike partnerships, where the law demands you share the profits equally amongst all members, in an LLC, you can decide who gets more depending on how much they invested into the business. In this case, investment isn’t confined to monetary contributions. One of the owners may invest a lot of time into running the business and they’ll need compensation for that. That’s popularly known as ‘sweat equity.’

  1. Suitable For Small Business

If you’re going for a single-owner policy, you should consider using the LLC structure for your staffing business. Other business structures, such as partnerships, insist on multiple owners. But the LLC structure supports individual ownership. Thus, an LLC structure allows you to enjoy all the benefits as the sole business owner. It makes it a suitable option for small businesses.

Unlike where you have to consult with your other partners, an advantage of having single ownership is that you can make faster decisions concerning the business.

  1. Increases Your Business Credibility Levels

Credibility is essential for your business. As indicated earlier, an LLC is treated as a single entity. It’s more formal than a sole proprietorship. Therefore, it gives insights to the customers that your business is credible.

Since your business name is registered with the state secretary, no other business can bear your name. Thus, it also contributes to the credibility of your business. This way, you can attract more customers and lure more professionals to work with your business.

If you ask for external financing through loans from banks or other lenders, business credibility comes in handy. The lender can quickly tell your business's income and how much it’s worth. Thus, you can easily finance your business with such impressive credibility levels.

  1. Organizational Freedom

As a business owner, you’d want to enjoy the freedom of controlling the business. You can exercise such freedom in an LLC model. For one, you’re not limited to a particular number of members. Again, you don’t have to involve a board of directors in your business. This way, running and coordinating operations in your business is more effortless.  

  1. Privacy

For some reason, you may not want to be known as the owner of your staffing business. The LLC structure grants you this privilege because it’s not always mandatory to list the founding members on the formation documents. In some states, you’re allowed to list only one manager instead of all members. Thus, you can own and operate the business anonymously. Moreover, with the services of a registered agent, you can completely stay out of the picture regarding your business operations. It isn’t the case with a sole proprietorship, wherein the owner is synonymous with the business.


An LLC is undoubtedly an excellent option for a staffing business. Primarily, you get to protect your assets from liabilities associated with your business. Also, you make faster decisions for your business if you’re a sole owner and manager. In addition, the tax requirements are more lenient. Particularly, you’re exempted from double taxation, increasing your savings. For a more guaranteed outcome when forming an LLC, you’d want to hire professionals with vast expertise in it. They’ll fast-track the formation process and get you running as quickly as possible.