Are you risking your personal assets in your small business? A sticky situation with a customer or client could land you in an equally sticky spot. Today, we’re going to talk about whether you need to file as an LLC (limited liability company).
In late 2016, I wrote a post on the Businessese blog titled “Is an LLC Right for Your Blog?” Even years later, this is still the most popular post on the site, and it gets way more love from the Google search engine than I ever expected.
Nowadays, Businessese isn’t focused solely on bloggers and influencers anymore. But the topic of LLC formation is something that most online and service-based business owners consider, so I wanted to revisit the topic on the podcast.
In this episode, I’ll give a short overview of the three most common kinds of businesses and why LLCs are considered the easiest and most liked by small business owners. You’ll discover how to decide whether or not you actually need to file as an LLC, and I’ll offer up eight questions to ask yourself before you settle on how to do business.
If afterward you still aren’t sure, this is the best time to consult with your lawyer or CPA. They’ll be able to provide you with the customized guidance that you need to make your choice.
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In this episode:
[01:45] – Before diving into today’s topic, Danielle gives a quick disclaimer.
[02:09] – Here’s a short overview of the three most common business types: sole proprietorship, corporation, and LLC.
[03:04] – Why wouldn’t everybody be a sole proprietor if it sounds easier? Danielle talks about the distinction between it and doing business as a corporation or an LLC.
[04:24] – Corporations are far more complicated. They come with higher regulations and may require a number of formalities.
[05:06] – A limited liability company is an easier step between a sole proprietorship and a corporation. It makes sense for a lot of small business owners.
[06:31] – Taxation is another reason why many small business owners like LLCs.
[07:14] – Now for the big question: do you need an LLC?
[07:52] – Consider these eight questions if you’re thinking about whether an LLC is right for you.
[10:29] – Would you want to handle it yourself or hire a filing service or lawyer to complete it for you?
[10:57] – This consideration for setting up an LLC is a big one for some people. It can also depend on where you live.