Should you Become a Sole Proprietor or Start an LLC?

If you run a business or if you want to start a business, then you will need to decide if you become a sole proprietor or start an LLC. There are benefits and draw backs to both, you just need to make sure that you know which one will work for your business the best, so you can make decisions that go on to benefit you in the future.

Should you Become a Sole Proprietor?

There are many benefits to becoming a sole proprietor. This is the most popular business structure and it is a great way for you to simplify the process of registering your business. Some of the main advantages of becoming a sole proprietor include the fact that you can get an immediate start and that you can also just go ahead and submit an annual self-assessment to document your earnings. You don’t need to pay corporation tax, nor do you need to worry about how you are going to please your stakeholders in regard to the decisions you make.

It’s really easy as you are the only one in control of your operation. You can make all of the decisions you need and you can also keep everything. Because you are in control of your profits and what you have paid, you can feel confident knowing that you can invest as much or as little as you want. If you want to get a tax ID, it’s worth going through a FEIN filing service if you can, as this is often the best way for you to get the result you need.

Is an LLC the Way to Go?

If you want to go down a different route then it is also possible for you to start an LLC. The great thing about starting an LLC is that it gives you the chance to have personal liability protection. You may also find that you have flexible taxation and that you have complete ownership over your flexibility as a whole. You have distribution flexibility and more privacy.

This type of formation is more suited to those who are at great financial risk. You may also find that you gain a lot of protection from a legal standpoint too which is essential when it comes to your business credibility as a whole.

If you want to help yourself when it comes to forming your business then one of the best things you can do is have a chat with a financial advisor. The great thing about doing this is that they can talk you through the different options you have and they can also work with you to guide you through the different processes you may have to work through. They can also help you with your understanding of tax, which is great.