Naming.A sole proprietorship is known by the owner’s name on all government paperwork and banking. For example, if Joe Smith uses that structure for his landscaping business, the business’ legal name will be known as ‘Joe Smith.’ If Joe chooses ...
Tax implications of sole proprietorships vs. LLCs Here are some of the tax advantages and disadvantages to keep in mind as you set up your business: Self-employment tax considerations Both sole proprietors and LLC owners must pay self-employment tax, which is basically Social Security and Med...
Sole proprietors don't face the same requirements. However, if the business owner plans on operating under a company name instead of under their own name, they will need to register for a "fictitious business name," or DBA ("doing business as"), in their home state. 5. Tax consideration...
That said, I don’t feel at risk as a sole proprietor. Since I have the pass-through benefit of an LLC or S-corp without the filing and paperwork issues, is there a downside to my arrangement? Thanks for any comments! Reply Matt Horwitz November 8, 2017 Good points you’ve made, ...
If you're still unsure where you land on the sole proprietorship vs. LLC debate, take a moment to think about the nature of your business. Ask yourself the following questions. If you answer yes to one or more, an LLC might be the right choice. ...
A sole proprietorship means you're working for yourself alone. You're in charge and are responsible for the business entity. It's the easiest business type to form with the lowest startup costs. Independent contractors, business owners and even franchisees can all be sole proprietors. In fact...
When should a sole proprietor become an LLC? A sole proprietor should think about becoming an LLC for two main reasons. First, if they plan to bring in more owners. Second, to protect their personal assets from legal and financial issues. Given these points, moving to an LLC can be a ...
Both sole proprietors and LLCs are taxed as pass-through entities by the US Internal Revenue Service (IRS). This means that the business’s profits will pass through to its members to be reported on their personal tax returns. All profits are only taxed once, at each member’s individual...
Operating as a sole proprietor can give you a lot of freedom, but there are drawbacks to consider. Con: No liability protection Sole proprietors are personally responsible for any liabilities the business incurs. That means if you're sued for damages caused by the business,...
However, an LLC might not be necessary if you are selling products or services as a side hustle for limited additional income. If this is the case, you might just want to stay as a sole proprietor. Let's define a sole proprietorship,...