LLC vs Sole Proprietor: Which is best for YOUR business?
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- Опубликовано: 27 авг 2024
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One of the biggest questions I get as a business coach is “Should I run my business as a Sole Proprietor or setup an LLC?”
Maybe you’ve asked that question yourself. Perhaps you’ve been confused about which one makes sense from a tax perspective for your business.
Or maybe you actually thinking: “I don’t even know what either of those are and why should I care?!”
Today I want to simply explain the differences between the two and give you a simple and easy framework to know which is the right entity for your business.
This is probably the clearest explanation of the concept, great job keeping it simple.
Totally
Agreed!
ok hmm
hey wwwhat a great time w
Facts cuz I been confused as hell
Be careful, there's some information that isn't accurate in this video.
This is something schools need to teach, literally 4 years just for the experience and a piece of paper..
Okoook b no lo oookkinnkononoknok koo noon looking
Okoook b no lo oookkinnkononoknok koo noon looking m
school is not about education. It's about indoctrination.
@@eruston exactly.
Indoctrination and enslavement (being indebted so u always have yo work and working all your life, but having nothing to show for it)
Schools dont want people to work for themselves and make money. Schools are designed to dumb people down and send them off to the factories because factories need people who dont have options. If everyone was taught how to set themselves up for success with their own business there wouldnt be employees anywhere.
Excellent video. Tax matters aside, I formed an LLC to protect my personal assets if my business gets sued. Your personal assets are at risk if you are a sole proprietor and your business gets sued. That's something to consider.
@RedEyeOf Jupiter it can impact your personal credit and affect you for years to come. Depending on if/what you get sued for and how much they are demanding.
What if at thr moment I have no assets
What if you have liability insurance
I’m in CA
Aren’t you unable to sue someone when their assets don’t exceed $500,000?
@@OutdoorsyVibe If that is true in California, the old saying about Cal being the land of fruits and nuts is accurate. No offense to you Nick. To my knowledge, anyone can be sued by anyone else, anywhere in the good old USA.
I am a sole proprietor and this video really cleared up my current confusion on if I should pay for the LLC. I’m not making nearly as much as you recommended so I feel comfortable in waiting. Thank you for sharing! God bless.
Are u doing better now ?
Haveing a LLC is to protect your assets, a sole Proprietor does not protect your assets if you get sued.
@@idbountyhunter what if you don't have any assets?
@@Chrichna_D Doesn't matter,Your personal credit score will hurt badly and banks are less likely to give you a loan.
Hello! What do you mean? By being Sole proprietor or LLC?
Thank you
I was just about to start LLC process, but I thank God I came across this video. Very helpful . Thank you so much for sharing this.
I started an LLC 2 years ago not realizing a sole proprietorship would be better for me. It's good to know this early.
@@astralblue You might feel better after watching this. I always watch multiple videos on a single topic to try+get the most info on a single topic. ruclips.net/video/3J7HG6IuV_c/видео.html
I've watched 8 videos by different people on this topic, so far.
astralblue same
astralblue what’s the paper work and where did u turn it in plzz answer
I formed an LLC for 1 big reason - to separate my personal finances from my business's finances, because it the event of my business being sued I want to save my savings. The way you wrote down where exactly the savings may come from for an LLC was very helpful, and I am even more convinced now that it was the right decision to have an LLC. I don't mind doing my own accounting and my own taxes, it's actually fun for me, so I will be saving a lot of money in taxes (looks like).
You gloss right over one of the biggest reasons for an LLC.... Not losing your entire life's work to some scumbag who decides to call a lawyer. And it doesn't matter HOW much money your business is making. They will sue. Another thing to consider is how likely is your business to get sued? In certain businesses, it's a lot riskier.
Seriously SOOOO helpful. Starting a business has been stressing me out, and I didn’t hardly know what a sole proprietor was. I’m subscribing and adding your other videos to my watch later list 😊😊
Thanks for watching!
OMG thank you for this! I just opened a DBA in California for my wedding and event planning and decorating services. I have been feeling like what if its the wrong move? I don't have a lot of money I just started gaining momentum and I'm totally ok with moving every day and growing slowly. This video makes me feel a lot better about not rushing into an LLC.
Same. I'm a wedding videographer and was wondering if I should've done a LLC. How is business for you so far?
Thank you I’m I think I’m best with the sole proprietorship the LLC tax thing is too confusing for me right now lol
I am starting the process of making my home bakery legal and this video was extremely helpful. I definitely don’t make enough money with it yet to worry about forming an LLC. I am saving this video for future reference. You’re a great teacher!
This video by far is the most informative and easy to follow presentation on LLC vs. Sole proprietor
Just starting a new business and I was on the fence about switching to an LLC. Watching this video I think I'll keep the sole proprietor for now. Very helpful, thanks.
I have been so confused between Sole Proprietor vs LLC. This is the best Video that I have seen that explained things clearly! Thank you!
I've never not regretted clicking on a video more in my life
This is by far the best video I've watched and now im 100% more clear that i am a sole proprietor and i need more time to start my llc s corp but now im on the right path and i have no prior business experience but now thanks to this guy i have the experience i need
Starting a small clothing, I think I’ll go with a sole proprietorship until I start making “real” money.
I just started my online business and I’m still learning English by the way, but to be honest I understand you clearly and this video answer my questions, thank you 🙏
Great to hear!
This video is a few years old but explain things so well, I'm a sole proprietor
Not only you teached me how to mix, now you teached me how to manage my audio company!? Holy cow you are amazing. who would've thought that the same person would've helped me all the way from start to finish!?
One of the more helpful videos i have ever seen on RUclips. Thank you for being so clear and straightforward.
I'm currently 16 but in the future I want to start my own business someday. I'm thinking of the LLC option because that seems like a better fit for me.
Come back to my reply when you do . Perhaps you can hire me young man .👍
@@INDREAMSBEGINSRESPONSIBILITIES XD I still have a lot to learn though lol
Why not start your business now? I encourage you to do so.
@@cdmanor777 Okay, I will start early, thanks for the advice :D
5:25, my man delivers. Thank you for clearing that up. I am just starting out and while I do want to do things right, I am not making enough to warrant an LLC.
Thank you I am opening a small locksmith business and it will just be me and I have been racking my brain on how to start. Thank you!!!!
The clarity on this video was AMAZINGLY helpful. Thank You.
Thanks so much for this video! Cleared up so much confusion I had with all the tax jargon. Definitely don’t need to be stressing about an LLC right now. Sole Proprietor sounds like the way to go.
Its now 2021 and this info is still good
The best advice I've had on how I should form my business when I start it. Especially the rule on making at least $50k a year before starting an LLC.
I cannot thank you enough for creating this video. I have watched upwards of 20 different videos on LLCs vs S Corp and sole proprietorship and this time...it clicked! Great work! In January I broke off from my "cushy" full time job with benefits to pursue what I love and what makes me excited to get up in the morning for: Voice Over work/audio production. Sounds like that might be in your wheelhouse as well. Cheers!Anywho...I've been trying to figure out what my best course of action would be administratively/legally and you have left me feeling fully equipped with the thoroughness of this video. Thank you again!
So glad it was helpful! My dad does Voice Over work part time and loves it.
I've been pulling my hair out trying to understand the difference. Found your video and theyre awesome!!!! Thank you!!!!
The clearest explanation ever this guy is amazing.
Your 2 favorite words have now become mine as well...tax savings. Thanks for the video.
I have been looking all over RUclips and THIS is exactly what I was hoping to find. Thanks! The graphic/breakdown is so helpful.
Glad to help!
This video has helped me immensely!!! I am a notary and I didn't understand about LLc's or what it meant to be a sole proprietor. I understand a whole lot better now. Thank you for this video.
Best explanation ever... just started a rental property and your video really helped me alot.. You got a subscriber here
I just watched like 5 tax/LLC/Sole Proprietor and my head was spinning. Man am I glad that I saw this video. Easy to understand, to the point, mad informative! Thank you
Out of all the videos, this was the simplest one to understand! Thanks so much.
You're welcome!
Thanks! I've been reading on this for the last 2 days (tax sites), and you were the only one who completely explained it. Kuddos!
Glad to help!
This is the most effecient clear explanation and advice to new entrepeneurs out of all the vidz on youtube.....thank you
This just saved me a $150 consultation fee ~ Thank you!!!
Wow this was extremely helpful. I have been killing myself with all this search and you have make it clear. Thank you for this video. I will definitely hold off on the LLC until I get the business up and working.
WOW, you're great at explaining things!!!! So clear and to the point and filled with actual information!!! Thank you so much sir!!!!!
The most concise and clearest explanation on the subject I've come across. Thank you so much Graham
You just saved a life, and I'm keeping all your contents. Let's go 👊🏾👊🏾👊🏾
I liked your video! I have used SP for about 25 years. I do have two DBA's with checking accounts. Since I have seven dependents I've always got a tax refund because my regular write offs from overhead cost don't outweigh what the Fed gives me in standard deductions with the big family. For us ,the idea of an LLC would make sense if we decide to hire people. I'd have to spend lots of money of marketing to create enough business to employ a technician. So far this has never happened. I use sub contractors to assist me with their own business license and insurance. The interesting thing is you can train a person and bring them "up to speed" and that person may realize they can start their own business and make more money on their own..that is how the ball bounces in the real world. If the perks aren't good enough, people just move on anyway.
What’s dba
Thank you for the clarity!!!! This video was SO helpful 🙏. My husband is a sole proprietor for 3 1/2 years now. Our tax person advised us to look into a LLC since his business is growing, this past February! We thought we had to rely on him but realized we could apply online so we are researching to make the best options. Again, Thanks 👍.
New business... Sole proprietor... The BEST video ever for explaining what is what
Not making THAT much money as a sole proprietor but I formed an LLC anyway for the legal protection. The cost was worth the peace of mind.
Great point!
This was very straight forward and very helpful thanks!
I second that!
Third that!
Very insightful. It answered a lot of my questions about selection of legal structure and tax benefits of sole proprietor vs. an LLC.
Thank you so much. I am a hairdresser/makeup artist filing as a Sole Proprietor.
Hi. So I was going through the application process of getting my EIN number and had to decide if I were sole proprietor or as an LLC. I panicked and immediately backed out of the application process....lol, I find a lot of DIY’s on RUclips and figured why not!?! Came across your video and I know for sure I’ll apply as a sole proprietor, for now. Thanks for the hand up and I look forward to future informational videos.
I love your format. Nice lighting and upbeat music. Thanks for the information.
This was extremely helpful. I am in the process of starting a business and don't want to take on more than I need to. Especially in the beginning stages. Thank you so much for this information.
This has been the best video I’ve seen explaining the difference between the two. Great vid.
Man you broke it down so easily man man all I can say is man man I don't know how else can you break it down for anybody else to understand it but you did a very good job you got to the point my man ☺️
Thank you so much for this. I can’t believe RUclips is free soemtimes. Also for us visual leanrers would you mind putting graphics and the words next to what youre saying? It would help everything make more sense and add tangiblity to the information. Thanks again
You... are extremely helpful, my friend. Thank you!
And you are extremely beautiful. I'd like to be your sole proprietor. ;)
briana lowe looking forward to watching your weight loss video
@@trollingisasport 🤣🤣🤣🤣🤣🤣
I was just about to get a LLC, until I watched you and another guy say the same things. Thanks for the SAVE!
This video gets an UNDENIABLE standing ovation!! Bravo!
Best explanation on RUclips
The clearest and most easy to understand information I have come across! Saving this video! Good job! Thank you!!!
Oh, and I own a photography business and I am a sole proprietor!
Very much appreciate the clear explanation and discription of both. I thought about a sole propietor, but because of dangers to the users of my business, kayaking guide, it is clear I need an LLC.
Thank you for this video it truly helped me to understand which is best for me.
Very helpful. Clear speaking, to the point and at a good pace. Thank you.
You're welcome!
Excellent parsing out of this very confusing topic!
Thanks for this video! I’m set up as a sole proprietor because I was starting a second business but was already self employed in one business. So for getting launched, and not making a ton, I just kept it as a sole proprietor and filed it all under one return. I just completed year 2 of my second business which is outpacing my first so I’m working on trying to transition to one business only, and going to restructure as an LLC this year. This video just confirmed that I’m at the point where I’m ready and it makes sense going forward with my current sales and my sales goals for the year to become an LLC and separate things out.
Congrats!
This video was perfect for me with all the questions in my head that needed to be answered , and some that I didn’t know about. I am starting a Sole Proprietor but hope one day to get into an LLC. Thank you for this knowledge in this video. HIGHLY RECCOMMEND TO WATCH !! I am a beginner and new to all this it really helped out.
Thank you so much for this video! It has helped me make my decision I was so stressed out about this before I watched this video
Fantastic. Super clear. Now I understand the difference in tax savings. Thank you, Graham!
I needed this video. Thank you so much! I have been considering forming an LLC but so far I have only made $900 on my side hustle. I did set up an EIN for a DBA.
This guy is the greatest. He delivers valuable information and simplifies things.
I like the lighting setup in your videos. Very professional and slick!
4:38 = this is the crux right here. Thank you Graham for explaining this is amazing clarity :) 8:29 also
I plan on getting started I have to separate business ideas so I believe I'm going to form an LLC just to have them both under the same umbrella
This video is fantastic, an essential watch for anyone looking to get into starting a business.
Super helpful. I have had a SP for many years now and want to move to LLC.
1. Can I convert existing business or do I have to start a new one
2. Does it matter what time of the tax year I do this conversion? For example, if I create an LLC in June, 6 months will be taxed as LLC and 6 months as Sole prop? How does that work?
1. Yes you can convert your business
2. Whenever you start it you’ll be taxed as two things the following year since it was a bit of both.
Thank you man, this is great info.
I'm a sole proprietor doing about 125 - 175k per year. About to go a lot bigger- 2 more cities. I figure it's a no brainer to go LLC (in Canada by the way).
I have 0 personal assets besides this business, so I've been scratching my head as to why I would need to.
What do you think? Do I really NEED to go LLC? Will I really have tax benefits? I spend most of my money on business growth. Margin is probably about 50%, but it all goes back in.
Would love to also hear deets about your coaching :)
If ur making more than 100k a year it’s highly recommended becoming a llc for liability reasons
Graham explains it very well that for - liability
If you make more than 50K
Which you stated you do- it’s good to create a LLC.
But if you meant you reside (live) in Canada- Graham is going by the United States tax guidance and this may likely be different in ... Canada 😁
Also, if somebody sue u, if u have an LLC, it protects them from taking your personal possessions like your house or cars, but a Sole proprietorship wouldn't protect u from those things
My son and I are a partnership LLC. We did this because we did not have enough money to cover the cost of opening two separate business. We do construction work and are 1099. My son now wants to do something different as far as work goes. I am still not sure if I want to just remove him as a member or dissolve the business all together and start my own business. One of the benefits was that we were able to get a spark business card in the company's name due to his credit. We were also able to get other accounts that we needed to operate the business with. This year we have made 52,000 together. We have bought many new tools as well.
This is the clearest example if the differences I've seen and I'm glad I found it before starting as an LLC. Thanks for the video, going to subscribe now!
Thank you for the very basic and informative discussion.
Very helpful and thank you for explaining everything slowly and very easy to understand. I will be talking with my accountant to see if I should do the switch from a sole proprietor to an llc.
Q. Even though you say 10,000 in expenses as example, isn’t there a way to do write offs for things as a sole proprietor? There has to be a way to do write offs and pay less than what you claim. As business you can write off tons of things. To the point you can reduce a big amount on the taxation.
Wow you literally answer the questions I had 💕😭 thank you so much for being super clear with the information
Well done. Super helpful and concise. Thank you
Just starting a resell business on Poshmark. It’s a slow start. I will go the sole proprietorship route. Thanks for your help!
I’m currently getting ready to start a business soon. I was confused about sole practitioner and LLC before I sign the paperwork. Thank you for sharing this important information.
This was super helpful!!! I really needed this breakdown. It got right to the point and very informative. Thanks so much!!
Wow thank you!! Very informative!
Wow. Love this video. You explained this so simply. I get it.
This video was helpful. I am starting my business and I am not making any money yet. I was wondering if I needed an LLC when starting for the tax benefits. I was also wondering if I needed to open a new bank account for my business earnings. Now I know I don't need to necessarily worry about an LLC just yet. I also learned that starting a new account under my business name for my business would be a good idea.
Watch it at 1.25 speed makes this video watchable. Good job on the information!
Thank you so much for that distilled breakdown!
You’re welcome!
Sole proprietor it is. THANKS!
I am a new sole proprietor that hasn’t made any tax payments. I started last fall and only made $700 so I will pay tax on my personal taxes this year was the plan. But now I making approximately $500 a month so I think I will need to pay the IRS quarterly. Small potatoes but I want to do it correctly. Thanks for a great video.
this clarified everything i was searching on ! thank you so much , im opening my own business but i was so confused on what exactly i needed to do . now i now i think with the type of work my company will do a LLC will be the best way to go since its more on construction and i know how much roughly it brings in yearly .
Thank you, Graham. I just started a business last year as a sole proprietor and I'm just now learning about both LLC and it from a course I am taking regarding my business (Wedding and Events). I didn't know about either one and just picked sole proprietor because a friend said to. This video was very helpful as we will be discussing this topic on next week's Module. Not sure exactly what all your topics are about, however, I would like to know more about business names. I Just found out that I have chosen a name that already exist although the other name has llc at the end of it. Thank you for sharing in layman's terms.
Yea he made this one “for dummies” GREAT video
VERY CLEAR, EASY TO UNDERSTAND. I HAVE JUST FILLED OUT ALL THE PAPER WORK FOR AN LLC, PROBABLY A BIT PREMATURE ACCORDING TO YOUR ADVISE CAUSE I HAVEN'T MADE DIME ONE YET. THANK YOU VERY MUCH!!
One of the best videos ive watched in recent time. Thanks a bunch