Sole Proprietor vs LLC

[esoterik_appeal]

Thanks for the help everyone, going to go talk with an accountant soon. I'm thinking DIY accounting looks like DIY tinting

[Diablo's Tint]

(not tax advice and talk to accountant) I'd do SP first, it's cheaper to start & you'll probably have a loss the first year or two, and if you're working somewhere else it makes it easy do deduct your losses on your taxes (pass through or something like that),  once your up and running LLC. You can homestead you house and have the same protection. I'm not sure your situation. In Las Vegas, the common trend is having a personal guarantee even if you have a LLC.

[JJAWS]

On 7/22/2018 at 11:08 AM, esoterik_appeal said:

Do you still carry insurance as an S Corp? And as a sole proprietor are your personal assets at risk from legal action?

yes 100%

[startupbusinessbureau]

When you compare both terms at the level of personal liability, you will see an LLC is more beneficial than a sole Proprietorship.

In a sole proprietorship, the liability is not limited, and the owner of the business is liable to his assets to pay the company’s debts.

We have seen in most cases. Owners have to sell their personal property to clear out the due losses of the business.

On the other hand, an LLC has the feature of limited liability. In case of any loss to the company, the liability will be limited to its value of shares and assets.

There is no liability upon the founders of the company. So in a sole proprietorship vs LLC, the clear winner is an LLC-based business.

Edited April 1, 2021 by Roach
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