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What is the difference between a sole proprietorship and an LLC?

April 26, 2017difference LLC proprietorship sole

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What is the difference between a sole proprietorship and an LLC?

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There is a huge difference. Operating your business as a sole proprietorship under state law means that you are running your business in your individual capacity. Your business is a part of “you” when it comes to a sole proprietorship. As a result, everything you own (home, car, savings, anything) is 100% at risk for the business debts and liabilities of your business. In today’s litigious society, 1 out of 5 people are sued each year and your chances of being sued are very high no matter who you are. The costs to form and maintain an LLC are so low now that there is no reason to plan against this risk by using a properly formed and maintained LLC.