Sole-Proprietorship v. Single Member LLC

[KRWOOL]

What are the benefits of having a sole-proprietorship versus a single member LLC?

Thanks

 

[LdiJ]

What are the benefits of having a sole-proprietorship versus a single member LLC?

Thanks

The are identical in how they are handled tax-wise, a single member LLC is a disregarded entity for tax purposes therefore the income and expenses are still reported on Schedule C.

An LLC however can offer some protections in terms of liability, although those are somewhat minor when its a single member LLC. If that is your goal, a better way to make sure that you are covered for liability is to have a good liability insurance policy.

 

[davew128]

US LAW ONLY

And yes, tax issues aside, the state DOES matter as well as the facts.