Sole Proprietorship vs LLC - Which One to Choose?

Hello there!

Whew! I cannot believe it is almost the end of week ONE in the year 2009! What a busy and exciting week. I managed to knock off 2 of the 6 business goals so far. I decided to treat myself to a waffle bowl of Bart's ic cream at Marble Slab Creamery. Yumm!!

Okay, so I look back at how I made my entrance into the virtual assistant (VA) world and I guess you could say I never really started the "right" way. I mean you are suppose to have a business plan in place, choose your niche, select a business structure, choose a business name, etc. Of course, I am totally not following steps 1, 2, 3, ...it is always better to go with the flow - make it fun and exciting along the way!

I was looking into difference forms of business structures that I have seen in the VA world - sole proprietorship and LLC. For me, I have chosen to be a sole propiertorship structure with sub-contractrors on an as-needed basis. I think this type of structure is the easiest to form and most inexpensive. It is just me and I operate my business, am personally liable for business debts, and report profits/losses on my personal income tax returns.

For those that want to take advantage of a partnership AND sole propriertorship, the limited liability company (LLC) would be a great fit. This structure's profits and losses can be passed through the company and members versus the individual owner. You will need to register with the Secretary of State you live in and pay fees to set it up, but in the long run - you will probaly save more on taxes with this structure!

To learn more about these business structures and more, contact your local Small Business Administration (SBA) office or here is an article that is useful to read - "What is the Best Legal Structure for my Small Business?"

Next time I see you, we will discuss the marketing version of a virtual assistant business - which I definitely need to work on. Take care and have a wonderful weekend!