Short Definition:
A Limited Liability Company (LLC) is a business structure that creates a legal separation between the owner and the business, protecting personal assets from the company’s debts and liabilities.
Why It Matters
For small business owners, protecting personal assets is a top priority. An LLC is one of the most popular ways to do that. If your business is sued or owes money, your home, savings, and other personal property are generally shielded from risk.
LLCs also offer tax flexibility and are often easier to manage than corporations, making them a favorite among contractors, makers, and service providers. Many WorkBay tenants choose to form an LLC before signing a lease to give themselves peace of mind as they grow.
How It Works
An LLC is a legal entity formed at the state level. You can have a single-member LLC (just you) or a multi-member LLC (shared ownership). Once established, the LLC can own property, enter contracts, and conduct business in its own name.
Key characteristics include:
- Credibility — “LLC” in your business name can signal professionalism to clients and partners.
- Liability protection — your personal assets are separate from the business’s debts and legal obligations.
- Flexible taxation — LLCs can choose to be taxed as a sole proprietorship, partnership, or corporation.
- Simple management — fewer formalities than a corporation.
WorkBay’s Approach
WorkBay works with many LLC owners — from one-person contracting businesses to growing small manufacturers. Our leases are LLC-friendly, and we make the process straightforward for new business entities.
If you’re forming an LLC and need to show proof of address or business location, our move-in-ready units can help you get established fast.
Real-World Example
A welding contractor wants to expand into larger jobs and hire a small crew. They form an LLC to protect personal assets and give clients more confidence in their business. After setting up the LLC, they lease a trade-friendly WorkBay unit, complete with high-power electrical and mess-friendly flooring, to handle the new workload.
Frequently Asked Questions
How do I form an LLC?
You file formation documents with your state (often called “Articles of Organization”) and pay a filing fee. Most states also require an annual report and fee to keep your LLC in good standing.
Do I need an attorney to start an LLC?
No — many business owners file the paperwork themselves or use an online service. However, an attorney can help if you have multiple owners or a complex business structure.
How is an LLC taxed?
By default, single-member LLCs are taxed like sole proprietorships and multi-member LLCs are taxed like partnerships. You can also elect corporate taxation if it’s beneficial.
Is an LLC required to rent a commercial space?
Not necessarily. WorkBay works with LLCs, sole proprietors, and other business structures.
What’s the difference between an LLC and a corporation?
Both offer liability protection, but corporations have more formal management structures, stricter reporting requirements, and may be better suited for raising investment capital.