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  • Writer's pictureNicole Bernier, Esq.

What is an LLC? The Basics for a Solo Business Owner

If you are starting your own business you could be a sole proprietor, or you may be considering forming an LLC. Unlike a sole proprietorship, an LLC is a separate entity for your business ("LLC" stands for "Limited Liability Company"). This entity has some unique properties:

  1. Protection for Your Personal Stuff: If your business gets into trouble (like financial or legal), your personal belongings (like your house, car, and personal savings) are usually safe. They can't be taken to pay the business's debts. This is the "Limited Liability" part.

  2. Flexibility in Money Matters: Having an LLC gives you options for how you want to be taxed. You can choose to have the business itself pay taxes (just like big corporations) or you can have the business's profits and losses go on your personal tax return.

  3. Less Paperwork: Compared to corporations (another kind of business entity), LLCs usually have fewer annual requirements and ongoing formalities.

  4. Flexibility in Management: With an LLC, you can decide how you want to run things. There's no strict structure you need to follow, unlike some other business types.

Remember: Starting an LLC does require some paperwork and fees. Each state in the U.S. has its own rules and costs for setting up an LLC. Also, the LLC's protective features only work if you're running your business properly! If you're serious about it, it's a good idea to chat with a legal expert or do some online research to understand the specifics for where you live.

Recap: Why Consider an LLC? If you're thinking of starting a business, an LLC might be a good choice because it's simpler than some other options, gives you legal protection, and offers flexibility in how the business is run and taxed. It also makes things more official!

Ready to Start your Business?

Starting a business doesn't have to be a daunting task. If you have any questions or need assistance with forming your business, feel free to reach out. I would be happy to help guide you through your business journey!

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