Sole Proprietorship vs. LLC
For this reason, almost all businesses start out as sole proprietorships. Accounting for taxes is also relatively simple. For legal purposes, the sole proprietorship is not considered separate from the owner. They are one in the same. Income generated by the business is reported on a Schedule C of the owner’s Form 1040. Because the owner and the business are legally considered one entity, the owner will be personally liable for any and all of the obligations of the business. This is the biggest drawback of the sole proprietorship, and one must decide if the simplicity and cost savings of operating as a sole proprietorship outweigh putting the owner’s personal assets at risk. Single-Member LLC For risk-averse solo business owners, the limited liability of the single-member LLC may outweigh the higher formation costs and formality requirements of a limited liability company. Unlike sole proprietorship, a single-member LLC is
considered a separate legal entity. The owner of the LLC generally
will not be held personally liable for obligations
created
on behalf of the LLC. However, limited liability is not absolute, and the owner of a single member LLC must ensure that the LLC is treated as a distinct entity. Forming an LLC does not, by itself, grant the owner liability protection. The owner must expend time and energy ensuring that the formalities of operating as an LLC are met. This includes adequately capitalizing the LLC, keeping business and personal funds separate, following proper voting procedures, filing annual reports, holding annual meetings, and recording company minutes.
If you are a sole business owner, you have
three primary choices when it comes to the best kind of entity for your business:
s ole proprietorship, single-member LLC, and
corporation . Let’s take a closer look at sole proprietorship and single-member LLC.
Sole Proprietorship This is the simplest and cheapest business entity to form. In fact, as soon as you commence business solo, you will be operating as a sole proprietorship by default.
PISTACHIO GOJI BERRY GRANOLA
Laugh Out Loud
Ingredients
•
1/3 cup pistachios, chopped
•
1 cup rolled oats
•
1/2 teaspoon salt
•
1/4 cup coconut flakes
•
1 tablespoon coconut oil
•
1 teaspoon cinnamon
•
1/3 cup goji berries
•
3 tablespoons maple syrup
Directions
1. Heat a large skillet over low heat. Add oats in a thin layer and toast for 1–2 minutes. Add coconut oil and salt, then stir. Continue toasting for 5–7 minutes, stirring occasionally. 2. Add maple syrup 1 tablespoon at a time; stir to coat. 3. Once oats are toasted, add pistachios, coconut flakes, and cinnamon. Cook slowly until pistachios and coconut flakes are toasted but not burned, about 5 minutes. 4. Remove from pan and stir in goji berries. 5. Let cool and enjoy as a snack or on top of your yogurt!
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(Recipe inspired by LoveAndLemons.com.)
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