Author Topic: Sole proprietorship or LLC?  (Read 744 times)

tag

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Sole proprietorship or LLC?
« on: December 26, 2017, 11:04:36 PM »
Iíve been posting about the FIRE-friendly side hustle Iím starting - Professional Organizer/Downsizer/Minimizer - and Iím getting lots of positive nudges from the universe so Iím just going to do it!

I have read through all the details about registering as a sole proprietorship versus an LLC. My goal is to work an average of only 10 hours a week because my main hustle is parenting, homeschooling and laughing or snuggling with my kids. Sole proprietorship seems like the easy thing to do but is it just always smarter to go the LLC route for maximum protection of our big, fat hard-earned nest egg?

jpdx

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Re: Sole proprietorship or LLC?
« Reply #1 on: December 27, 2017, 12:04:56 AM »
In terms of taxes, you will likely choose to have your LLC taxed as a sole proprietor -- so no advantage there.

For asset protection, a LLC will offer some liability protection, but it is not foolproof. For starters you should separate your business and personal assets, bank accounts, and credit cards. That is my understanding but I am not a lawyer.

You will want to do some research on your state's fees for registering and taxing a LLC. This can vary significantly between states.

SeattleCPA

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Re: Sole proprietorship or LLC?
« Reply #2 on: December 27, 2017, 08:53:30 AM »
In terms of taxes, you will likely choose to have your LLC taxed as a sole proprietor -- so no advantage there.

For asset protection, a LLC will offer some liability protection, but it is not foolproof. For starters you should separate your business and personal assets, bank accounts, and credit cards. That is my understanding but I am not a lawyer.

You will want to do some research on your state's fees for registering and taxing a LLC. This can vary significantly between states.

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