Are you a yoga instructor looking to make the right business move? Let’s dive into the debate of sole proprietorship vs. LLC in the yoga industry.
Summary
- LLC offers personal liability protection but may not impact tax status significantly.
- Setting up a separate bank account for LLC is crucial for asset protection.
- Some prefer sole proprietorship until expanding and hiring employees.
LLC Offers Protection
One user highlighted that an LLC provides personal asset protection in case of lawsuits, emphasizing the importance of business insurance. However, an LLC may not alter tax status unless an s-corp election is made. The clean separation between personal and company finances is essential for maximizing the benefits of an LLC.
Sole Proprietorship Simplicity
On the other hand, some users found operating as a sole proprietor sufficient until their businesses grew to include hiring staff. They felt that the time and cost involved in forming an LLC were not justified until expansion warranted it.
Legal Consultation Reminder
One user cautioned that the decision between sole proprietorship and LLC is more of a legal matter that should involve consultation with professionals like accountants and lawyers. While Reddit can offer insights, individual circumstances should guide the final choice.