September 27, 2018

Sole-Proprietorship or LLC?

I created a website, sole everything and bring in about $400 a month. I'm the only person, should I create an LLC? I'm not selling anything, I'm just an affiliate for someone else. Since I'm not selling anything, I can't get sued for any monatary lost.


  1. 3

    Incorporation means different things in different jurisdictions. In my area (Michigan, USA), creating an LLC is quite quick and fairly inexpensive. It allows me to create business bank accounts (a nice perk). In Michigan, at least, my LLC can be used to operate any business that can be legally operated (e.g.: is legal and doesn't require a specific trade license). Therefore, I use my LLC as an umbrella for all of my digital projects.

    IANAL, do your own research, etc.

  2. 3

    There seems to be no reason to LLC. Its just cost and administrative overhead for a business of your size. Its best to wait till your business outgrows the sole proprietorship before you incorporate.

    In my case the business income got too great and my tax bills were nuts. Means assessed things like school fees doubled. My business money was hopelessly mixed up in my personal accounts. There were other reasons too. But basically I outgrew the sole proprietorship.

  3. 2

    Are you sure you can't be sued? Double check that.

    Sole vs LLC most of the times comes down to limited liability and protecting your assets if things go wrong. Like @FunctionFocus mentioned look into it as it might not be that expensive to protect yourself financially.

  4. 1

    Assuming you're in the States, check your state's gov site and the fees and paperwork associated with starting an LLC. I'm in Louisiana and I started two LLCs for $125 each. Also, shop around for bank accounts for your biz once you have your EIN.