LLC vs. Sole Proprietorship

LLC vs. Sole Proprietorship

LLC vs. Sole Proprietorship 

Forming an LLC has a ton of benefits including the ability to write off your business expenses on your tax forms, and protection of your personal assets if you are sued. If you properly keep your business and personal purchases separate, the LLC will limit your liability in the event that something happens and you are sued. An LLC with only one member (owner) is a “single-member LLC”. The owner of a single-member LLC has personal liability protection, unlike the sole proprietor.

A sole proprietorship gives you complete control of your business. You're automatically considered to be a sole proprietorship if you don't register as any other kind of business. 

Sole proprietorships do not produce a separate business entity, which means your business assets and liabilities are not separate from your personal assets and liabilities. From a tax perspective, the individual owner treats the business’ income as its self-employment income.

Each state has its own set of requirements for opening a business. Some allow you to do it online and others make you do it by mail. The Small Business Administration can direct you to the proper website for your state. You can find more resources to help you start your business here on our website.

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