Posted June 14, 2024 by James Billings
The Limitations of Traditional Business Structures
Clients come to me frustrated with traditional business structures like corporations and LLCs in the United States. They are looking for something different—something easier, without all the bureaucratic red tape, fewer taxes, and higher levels of privacy. They realize they need to outsmart their competitors and the government to avoid losing business opportunities.
The Burden of Regulatory Obligations
The corporate and LLC regulatory obligations and visibility can be overwhelming. Many feel these obligations hold them back, diluting their energy from running their actual businesses. The paperwork, fees, and legal demands can make you question the necessity of such structures.
A Powerful Alternative: The Business Trust
However, there is one alternative that can put you ahead of competitors and government oversight: adopting the basic structure used by mutual funds, known as a business trust or unincorporated business organization. A business trust allows you to conduct operations and open business bank or brokerage accounts like a corporation but without the corporation.
Benefits of Business Trusts
Business trusts offer many tremendous benefits over corporations and LLCs:
- No Secretary of State registration required
- Virtually zero bureaucratic hassles
- No franchise taxes
- No legal requirement to keep corporate records
- Limited liability and high levels of privacy
Real-Life Success Story
Let me share a story of two businesswomen from the western United States who utilized a business trust to seize a unique opportunity without exposing themselves to the risks associated with traditional business structures. They managed to purchase a company with valuable trade secrets and special machinery, avoiding known and unknown risks by using a business trust.
Conclusion
Business trusts provide a significant advantage by staying off the radar, which is crucial in a competitive business environment. They are quick to set up, incur fewer taxes, and involve less hassle. If you are looking for a way to outsmart your competitors and the government, consider the benefits of a business trust.
Get your free copy of the LLC versus Business Trust comparison chart here.
If you have any questions, please contact James Billings, founder and owner of TrustArte, at james@trustarte.com or 619-537-8625. Visit my YouTube channel for video content.