I'm Starting a Business
I'm starting a business ...
Do I need an LLC?
The simple answer is, no, you don't need an LLC to start your own business, although you may, after consulting your business lawyer, decide you want one. An LLC, or limited liability company, provides personal liability protection and a formal business structure, but you can also get those things by forming a corporation or other type of business entity.
For those thinking of starting an LLC, here are six of the main LLC benefits.
Sole Proprietorship
A sole proprietorship is single-person business of any kind.
If you aren’t registering your business with the state but do have income and expenses that are separate from your regular household expenses, then you have a sole proprietorship.
This includes people who make things, teach classes, sell products, or provide services of any kind.
Independent Contractor
An independent contractor is someone who works for someone else, but not as an employee.
The primary difference between an independent contractor and a sole proprietor is that an independent contractor usually provides a service rather than a product.
He or she may be brought on as a consultant or to work on a specific project. In many cases, independent contractors, like consultants or creative professionals, provide expertise rather than specific products.
If you provide a contract to your client before beginning your work, chances are good you’re an independent contractor. If your customers buy products you’ve created in advance, then you’re probably a sole proprietor but not an independent contractor.
LLC
LLC stands for Limited Liability Company. By registering yourself as an LLC, you cut off the direct connection between your business and you as an individual.
Your business is a completely independent entity and your personal finances aren’t on the line for any future business debt.
Being an LLC can also help convince wary clients that your business is stable.
Do I need an LLC?
The simple answer is, no, you don't need an LLC to start your own business, although you may, after consulting your business lawyer, decide you want one. An LLC, or limited liability company, provides personal liability protection and a formal business structure, but you can also get those things by forming a corporation or other type of business entity.
For those thinking of starting an LLC, here are six of the main LLC benefits.
- Limited Personal Liability. ...
- Less Paperwork. ...
- Tax Advantages of an LLC. ...
- Ownership Flexibility. ...
- Management Flexibility. ...
- Flexible Profit Distributions.
Sole Proprietorship
A sole proprietorship is single-person business of any kind.
If you aren’t registering your business with the state but do have income and expenses that are separate from your regular household expenses, then you have a sole proprietorship.
This includes people who make things, teach classes, sell products, or provide services of any kind.
Independent Contractor
An independent contractor is someone who works for someone else, but not as an employee.
The primary difference between an independent contractor and a sole proprietor is that an independent contractor usually provides a service rather than a product.
He or she may be brought on as a consultant or to work on a specific project. In many cases, independent contractors, like consultants or creative professionals, provide expertise rather than specific products.
If you provide a contract to your client before beginning your work, chances are good you’re an independent contractor. If your customers buy products you’ve created in advance, then you’re probably a sole proprietor but not an independent contractor.
LLC
LLC stands for Limited Liability Company. By registering yourself as an LLC, you cut off the direct connection between your business and you as an individual.
Your business is a completely independent entity and your personal finances aren’t on the line for any future business debt.
Being an LLC can also help convince wary clients that your business is stable.
