- Taxes: When you invest as an individual, you will pay taxes on all sources of your income, including earnings from stock dividends and capital gains. LLCs do not pay federal income taxes, so when an owner makes investments through an LLC, they lessen their tax obligations.
- Liability Protection: When an LLC is established, it is a separate legal entity from its owners. The members of an LLC benefit from asset protection in the event that the LLC is ever sued or subject to collections by creditors. In an investment LLC, the members are only subject to losing what they have put into the company. Their personal assets like real estate, vehicles, and personal bank accounts are protected.
- More Capital: Investing with an investment LLC allows multiple people to combine their finances. This allows the LLC to purchase higher value stocks and diversify its portfolio.
External resource: https://www.contractscounsel.com/b/investment-llc#:~:text=Group%20Investing%3A%20An%20investment%20LLC,build%20savings%20for%20future%20generations.