AI provides a range of undeniable benefits to the business world including optimized operations, reduced costs, data-driven decisions, better customer service, and increased productivity. A study of 12 developed countries found that AI adoption can enhance productivity by 40%, improve profitability and boost consumer services.
The fact that AI allows robots to take over from repetitive and mundane jobs is a transition witnessed everywhere in businesses, from the assembly line to the efficient running of warehouses. The vast amount of data collected has become easier to analyze and implement, finding solutions from improving manufacture to offering consumers the right products. AI allows businesses to respond faster to consumer needs with customized experiences.
In 2019, the market size of artificial intelligence was valued at $27.23 billion. Fortune Business Insights 2020 recently projected it will grow to $266.92 billion by 2027.
As AI improves the way business is done, businesses apply it to improve their products and customer service. Many existing businesses and startups are aware of the growth potential offered by motor learning and AI. The growth they expect is encouraging them to improve their business operations and is prompting them to choose the LLC structure as their business formation.
Pros and Cons of an LLC
LLCs are one of the most popular business structures for small business owners because it offers simplicity and flexibility. This video presented by TRUiC (The Really Useful Information Company) is an excellent guide for those wanting to learn more.
Understanding the various business structures
Several popular business structure types are available to business owners. These include sole proprietorships, general partnerships, LLCs, and Corporations.
The sole proprietorship is the most basic business structure but has many limitations, including a limit on the duration of the business. Other limitations include that the business cannot be owned by another business, it does not have state-level registration, cannot elect how it is taxed, cannot issue stock, and offers its owners no limited liability protection.
Then again, corporations allow all the above but require annual meetings and are subject to double taxation.
Definition of LLC
The LLC meaning is a limited liability company. It is known as such because owners of this business structure are offered personal liability protection for assets that don’t belong to the business. However, their owners can still choose the pass-through taxation that a sole proprietorship or partnership offers.
Pros of Forming an LLC
LLCs are surprisingly easy and cheap to form, while also offering a range of pros that make them a popular choice with startups. One of the most important pros of an LLC is that it matches all the pros of a corporation without having the added requirement of holding annual meetings.
Besides the perpetual duration of their business, LLCs can be owned by other businesses and their owners have personal liability protection. Because LLCs are registered at the state level, they have credibility with their customers and creditors.
Taxation choices are another pro of an LLC formation. By default, LLC profits are reported by the LLC owners on their individual tax returns. This is known as pass-through taxation since the profits are only taxed once. This is the most popular form of taxation chosen by LLC owners.
This differs from the double taxation owners of C corporations face where the profits are taxed twice, once before they are distributed, and on the personal tax return.
However, LLCs can also opt to be taxed as S-Corp designations. Here the owners declare a salary and pay income tax and self-employment tax on that amount. Thereafter, any profit distributions are subject to income tax. Unless an LLC is taxed as an S-Corp where the maximum number of owners (members) can be up to 100, there is no limit to how many an LLC can have.
Finally, the ease with which an LLC can be formed is another pro for most startup owners. AI technology has made it easier to find a name for a business, and there are many wonderful online resources available to businessmen. These take them through the steps required, including templates for completing their LLC operating agreements.
Cons of forming an LLC
Corporations have a better advantage than LLCs when it comes to attracting investors.
AI allows LLC owners to achieve their business goals by gaining a competitive edge, while bigger corporations are providing platforms for innovative solutions. Today’s successful businesses are moving forward by including and adapting their businesses to these new technologies.