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Sole Proprietorship or LLC? [60 Second Law Bite]

Hey everyone, this attorney Brian Russ coming to you with a 60 second law bite. So today’s topic is sole proprietorship or an LLC, I get this question all the time people say, “I want to start a company, I want to start a business. I have this idea should I start a sole prop or LLC?” The key to remember with a determination of a sole proprietorship, or LLC is really to matter of risk allocation and liability shielding. So you want to make sure that you can operate a business in a way that is comfortable for you because if you’re a sole proprietor and you get sued for doing something wrong under your business, it is coming after you personally. It is your assets, you do not have a shield of corporate protection. That is a lot of times when people start LLC, it’s because they see that LLC provides protection, they’re called limited liability corporations, they have a potential limit to the liability. So that’s really the key you have to think about is how much risk are you willing to take on personally. If you’re selling line drawings on Etsy, probably low liability, maybe a sole prop is more appropriate. But if you’re starting a restaurant or food truck, get an LLC, you know, people are going to be put at risk.

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