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    Question

    I am starting a small business, should I do a LLC or Sole Proprietorship?
    I am starting a small business and would like to know the difference between a LLC and a Sole Proprietorship. What are the benifts of each and also what are the cons of each. The business will be based in Texas, and it will have one owner who is a woman, but about 3 other people on the payroll, and be run out of a home for now. Any insite on this would be great.
    a few seconds ago 3 Answers

    Best Answer

    A primary difference is in liability. A sole proprietorship is you. If your business gets sued or incurs some kind of liability, your personal assets (home, car, bank accounts, etc) are fair game for payment. If you establish a LLC (limited liability corporation), then a debtor can only go after the business's assets for payment, not your personal assets.
    a few seconds ago

    Other Answers

    • Hi, Mike. Congratulations on your new business. Contrary to an earlier post, an LLC does not have to cost a lot or involve a lot of extra paperwork. We create LLCs for people just like you by filing in New Mexico, a state known for its low-cost, low-maintenance, high-privacy LLCs. New Mexico LLCs are valid in all 50 states, including Texas. Most people don't know that it is perfectly legal to file your corporation or LLC in any state. It makes great business sense if there are time and money savings. New Mexico has a low, one-time filing fee that is included in our affordable package. New Mexico does not have an annual fee for LLCs (the LLC franchise fee in California, for example, is $800 per year just to keep the LLC alive). Nor does New Mexico have any annual report filing requirements. If privacy is also important to you, your personal name does not have to appear on paperwork we file with the state. Your ownership of the LLC is demonstrated on internal LLC documentation. Please contact us if you have further questions. Thanks, David at Bumby Brook LLC

      by David at Bumby Brook LLC - 14 hours ago

    • A sole proprietorship is much less formal than any kind of corporation. It's possible to swing personal and company resources back and forth, as they're needed. In a single person owned structure, this is a much easier way to do things, and it should be more than enough for what you describe. A LLC is more complex, and a great organization for multiple people with different levels of involvement. LLC's are great ways to divide responsibilities and financial involvement among many people, but involve a lot more formality and a ton more paperwork.

      by Rohasfin - 14 hours ago

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