Sole Prop vs LLC
I'm starting a social media marketing business and want to start out with as little expense as possible. I would like to start as a sole proprietorship until I get off the ground and then convert to an LLC. I see little risk in having sole prop in this industry, but would like to add the protections an LLC provides as I grow and potentially add employees. Is the process of converting difficult? Should it coincide with a certain date, like the start of the next year? For reference I will be operating in Illinois. Thanks!
Answer:
HI Kevin!
I always recommend starting off as an LLC because the default tax status for a single member LLC is a sole proprietorship. An LLC is a legal entity, then tax status is secondary. The reason to start off as an LLC is ease of transition to partnership or S Corp should your needs change.
Jackie Compton
