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Roger, Attorney
Category: Legal
Satisfied Customers: 31729
Experience:  BV Rated by Martindale-Hubbell; SuperLawyer rating by Thompson-Reuters
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This year I will be working as an independent contractor(International Tour Mana

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This year I will be working as an independent contractor(International Tour Manager) I expect to make less that $10,000 in income the first year. I would like to set up a business structure and am considering a Sole Proprietorship. My husband and my assets total about 1 million. I will be working for companies that carry liability insurance. Is a sole proprietorship right for me considering my assets or should I choose and LLC?
Submitted: 6 years ago.
Category: Legal
Expert:  Roger replied 6 years ago.

Hi - my name is XXXXX XXXXX I'm a litigation attorney here to assist you.


An LLC is the best option as it protects you from any liability for work you've performed under the name of the company. The LLC also provides tax benefits that a sole proprietorship will not.



Customer: replied 6 years ago.
Can you tell me what the tax benefits of an LLC vs the sole proprietorship?
Expert:  Roger replied 6 years ago.
Both an LLC and a sole proprietorship enjoy pass-through taxation, which means that the partnership, itself, is not directly taxed, and the tax burden is instead passed on to the partners. The biggest advantage of an LLC is that it provides you immunity from legal liability for all work performed under the name of the company. You're immune from all liability unless you commit a criminal act.
Customer: replied 6 years ago.
Thank you for the answer...but as a single member LLC (which is how I would set up the LLC if I went with it) would the tax advantage be any different than a Sole proprietorship? If not...than would the only advantage of the LLC be the liability protection? Isn't it true that I can still be sued even if I am working under and LLC. Considering all it still your recommendation to go with the LLC?
Expert:  Roger replied 6 years ago.

I'm not a CPA, so I can't swear that the taxation will be exactly the same. However, both a sole proprietorship and an LLC do use pass-through taxation.


The biggest difference in the two is protection from liability. A sole proprietorship provides no protection while an LLC provides absolute individual immunity from actions performed by the LLC except from criminal actions.


I would definitely recommend an LLC over any other type of legal business entity. It offers the most protection whether you're a single member entity or a billion dollar operation.

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