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Making the choice to utilize Limited Liability Company (LLC) Versus Sole Proprietorship entity for your business can me one of the most important decisions to make as a business owner. The majority of business choose to function as a sole proprietorship, choosing to structure your business as a Limited Liability Company will hold some substantial benefits, such as asset protection and broader access to small business financing options. In this article, we discuss LLC vs. Sole Proprietorship and how to make the best choice for your business.

What is a Sole Proprietorship?

When a business choose to distinguish themselves as a sole proprietorship, it basically begins conducting business without forming a separate legal entity. Sole Proprietorship is the most popular business structure utilized by small business owners in Nevada and throughout the United States. It can also be considered the most perilous. We have included below some aspects to consider if you decide to form your business as a sole proprietorship:

  • No necessary paperwork needed, besides industry-specific licenses
  • No yearly state filings required
  • Streamlined tax filing
  • No liability protection
  • Harder to acquire financing in the business name
  • More difficult to accumulate business credit

What is a Limited Liability Company (LLC)?

An LLC, or Limited Liability Company, combines the best parts of corporations, sole proprietorships, and partnerships into one business entity offering owners liability protection, flexible management structure, and certain tax advantages. Forming an LLC is a popular choice for business owners because of its convenience in establishing, also due to it being more affordable and more convenient to maintain than other business structures, for instance S corps or C corps, and mainly because it offers asset protection. We have included below some aspects to consider if you decide to form your business as an LLC:

  • Additional market credibility
  • Liability protection against potential lawsuits and commercial debts
  • Additional financing options
  • Not a tremendous level of paperwork involved
  • Yearly state filings
  • Tax pros and cons

Nevada Small Business Consulting will help you perform the necessary paper work and take the proper steps to make your business official and assist you in forming an LLC. We separate ourselves from other legal consultants because you will receive up-front pricing and there are no hidden costs involved with our services. We offer complete packages with everything you need to open a legal LLC. This includes LLC, State Business License, EIN (possible 2253 form for S-Corp status), operating agreement and any county or city license required. Contact us today at (702) 758-4691 to schedule an initial no-cost consultation!

In the next article we discuss the Pros & Cons of LLC vs. Sole Proprietorship

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