Entrepreneurs can find success with small businesses in Guam. Business owners can take advantage of various industries ranging from food services and retail to healthcare and finance. Those who choose to move forward with their concept and open a business are wise to consider various business entities. One of the more popular is the limited liability company (LLC).
There are many benefits to choosing an LLC. Three of the more common include the following.
#1: Personal liability protection.
This type of business structure offers personal asset protection, essentially meaning the LLC serves to separate the business’ assets from the owners’ personal assets like real estate and savings in the event the business incurs debt.
#2: Flexibility.
The law requires corporations have a board of directors and corporate officers. LLCs have a more flexible management structure that allows owners to tailor the management to the needs of the business.
LLCs also have greater flexibility over the distribution of profits. The LLC Operating Agreement generally guides distribution of profits regardless of the proportion of ownership. This means that members can agree to share profits in a way that doesn’t necessarily correspond to their percentage of ownership.
Transferring ownership in an LLC is also more straightforward than with a sole proprietorship or partnership. Owners can outline the details of transferring membership interest within the LLC’s Operating Agreement, allowing for a smooth transition when needed.
The language used within the operating agreement is important. As such, it is often wise to seek legal counsel to better ensure a document that meets your goals.
#3: Potential tax advantages.
Guam is a U.S. territory with its own tax system that mirrors the U.S. Internal Revenue Code. Although similar, there are some unique aspects to the system in Guam. When it comes to tax advantages, there are many that can benefit LLCs.
One of the key tax benefits to an LLC in the United States is that of the pass-through taxation structure. Business owners can make use of this same structure in Guam. This means the taxing authorities do not tax the LLC itself at the corporate level. Instead, profits and losses are reported on the individual tax returns of the owners, which can avoid double taxation.
It is important to note that tax laws and regulations that apply to business operations in Guam are complex and subject to change. Additionally, the specific benefits available to an LLC in Guam can vary based on the nature of the business, the structure of the company, and other factors. An attorney experienced in this niche area of law can review your situation and draft a plan to meet your business goals.