If I’m looking to start a business as a life coach, as a single person entity would it be best to start my business as a sole proprietorship or a LLC?
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If I’m looking to start a business as a life coach, as a single person entity would it be best to start my business as a sole proprietorship or a LLC?
Asked on July 27, 2015 under Business Law, Georgia
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 8 years ago | Contributor
Start your business as an LLC. Doing so will protect your personal assets (e.g. bank account, home) from most business-related debts or liability, other than--
* Anything you personally guaranty, like a business loan
* "Business" credit cards you take out (those are really personal cards with the business name on it)
* Certain tax debts
* Tort liability if you personally injure someone (e.g. run someone over while driving the company car)
While there are, as you can see, exceptions to the liabilty protection, you will be protected, if, for example, your company is sued by an unhappy customer; you company defaults on a lease or contract; etc.
Furthermore, it is easier and "cleaner" to take business tax deductions if the business is a separate entity. And many people (e.g. possible customers; vendors; etc.) will feel that a LLC is more "solid" or reputable than a sole proprietorship. The small cost to create and maintain an LLC is well worth it to get these advantages.
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