Tuesday, May 19, 2015
Should I Start a Sole Proprietorship or Limited Liability Company (LLC) for My Business?
May 19, 2015
I am not sure which business structure I need to set up for my business. What is the benefit of opening a Sole Proprietorship versus a Limited Liability Company (LLC)? Ready to Go in Birmingham
Dear Ready To Go:
You really should sit down with a business attorney and let him or her explain each legal structure to you but a few things that you need to know include is -- over 80% of all businesses are Sole Proprietorships, especially many youth businesses, but these businesses linger below the radar because they don’t conduct the proper research to build and grow successful businesses.
They tend to continue to be a one person business where you are self-employed or a micro business where you have a few employees. The Small Business Administration don’t even recognize your business unless you have a significant number of employees.
Remember businesses are designed to create jobs. If you have a business that does not hire people, then you might have a hobby not a business. Opening a Limited Liability Company (LLC) will give you more legal protection for your business in case you are sued and will make the business more attractive to investors.
Also having an LLC versus a Sole Proprietorship will lessen your chance of being audited by the Internal Revenue Service (IRS). For a list of steps to take to launch a successful business read Chapter 2 in the book “How To Take Control of Your Own Life: A Self-Help Guide To Starting Your Own Business” available as an e-book and paperback.