Is an LLC Right for My Business?

One of the first questions new clients usually ask is, “How do I become an LLC?”. Sometimes the answer is simple, and sometimes that’s not even what they need. An LLC may make you feel official in public, but it may not be all that you need to solidify the kind of business you’re preparing to run. Let’s discuss the most common types of small businesses, and how each category could apply to your new idea.


  1. Sole Proprietorship

  2. Limited Liability Company (LLC)

  3. Nonprofit Organization


A sole proprietorship is one of the most popular business models because it is simple and only requires one person. By definition, a sole proprietorship is a business owned by just one person. In this kind of business there isn't a lawful or financial distinction between the business itself and the business owner. This makes the business owner  fully accountable for all profits, liabilities and legal matters that a business may encounter. One of the most convenient aspects of a sole proprietorship is that you don't have to fill out any official forms or go through regulated legal procedures to own this kind of business. Just by owning a business on your own, a sole proprietorship is automatically associated with your new business. Depending on your product or service (and your location), you may need to access a specific license or other documents. If you’re wondering how to turn yourself into a brand (paid vlogger, blogger, online personality, online business etc.) sole proprietorship is a fitting option to consider.


A Limited Liability Company, better known as an LLC, is a business model that is a mixture of sole proprietorship and starting a corporation. Instead of stockholders, LLC owners are legally referred to as “members” of the company. No matter how many members a particular LLC hires over time, there should always be a governing member [the queen bee] who takes care of daily business operations. Unlike a corporation, LLCs are not taxed as a separate business entity. Instead, the total profits and losses are transferred from the business to the LLC members, who report business profits and spending on a personal federal tax return. One great thing about owning an LLC is that your members aren't personally held liable for any actions of your company. Honestly, there's also far less paperwork involved in solidifying an LLC versus a corporation. Essentially, LLCs allow small groups of people to come together and form a legitimate business. Who should become an LLC? Small businesses that sell physical products. You’ll be prepared just in case you need to hire extra hands to assemble orders as your brand becomes more popular.


A nonprofit organization is exactly that; a business-oriented organization that promotes charitable causes. The "non-profit" name comes into play because all money earned by the company must be used to pay for organizational expenses, programs, etc. Be mindful of the fact that there are several types of nonprofits that exist, and most of them can receive "tax exempt" status. The process of securing exemption requires filling out paperwork and applying with the government to become legally recognized as a nonprofit organization. Depending on the details of your new business, you will be guided toward the non-profit category that is best for your brand.

Being confused about licenses and tax requirements can become intimidating before you ever get started. It doesn’t have to be complicated! Before deciding what type of business you’ll need licensure for, check your state laws and then ask yourself the following questions:

  1. Is your company a charity or will you earn a profit?

  2. Do you have a business partner? If so, how much control will your partner have?

  3. Do you want to file the business taxes under YOUR social security number, or would you like your business to have a separate Tax ID?

  4. In cases where transactions go wrong, how much PERSONAL liability are you comfortable with accepting? 

  5. Will you hire any employees?

After you've answered these questions and have decided on a business type, the next steps are dependent on your state and local laws related to your business. It is also a great idea to join your local chamber of commerce for additional brand building tools.



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