LLC vs Sole Proprietorship — Which Is Right for You?
Should you form an LLC or stay a sole proprietor? Compare liability protection, taxes, costs, and paperwork for every state. Find the right structure for your business.
Quick answer: A sole proprietorship is free and instant — but your personal assets are on the line. An LLC adds liability protection and costs $40–$500 in state filing fees. If you have clients, contracts, or any real revenue, an LLC is almost always worth it.
👤 Sole Proprietorship
- Zero cost to start — no state filing
- Taxes filed on Schedule C
- No liability protection
- Business and personal taxes are one
- Harder to open a business bank account
🏛 LLC
- $40–$500 state filing fee
- Pass-through taxes by default
- Personal assets protected
- Option to elect S-Corp tax status
- More credibility with banks and clients
State-by-State Guides
Each guide covers your state's specific filing fee, liability rules, tax implications, and the breakeven point where an LLC saves you money.
All 50 state guides published.
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See exactly when forming an LLC pays for itself
Enter your state and industry to get your break-even year and 5-year liability protection value in dollars.
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