1. Forming an LLC

Forming an LLC

Author: Real Estate Holding Company

Published Jul 17th, 2023Updated Apr 25th, 2024
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Doing Business as an LLC

Doing business without protection is unwise. Creditors can seize everything in your name, including but not limited to bank accounts, homes and cars. Beyond risk, sole-proprietorships pay more in taxes because of the distinction between earned and unearned income. These drawbacks mean you eventually pay more for less.

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  • Limits Liability
  • Lowers Taxes
  • More Professional
  • Easier to Grow
  • Everything Done Online

Should I operate as a Sole-Proprietorship/DBA or an LLC?

You cannot benefit from business laws if you operate as a sole-proprietorship or DBA. Like the lottery, you must play to win. Whether you are a Sole-Prop or DBA makes no difference. DBA stands for "Doing Business As". That is, you are an individual, but you are allowed to use a separate name when doing business. Operating as a Sole-Prop has the following downsides:

Unlimited Liability: You are personally liable for any and all business debts, e.g. leases and lawsuits. There is no limit to your risk if there's an error. Your car, home, and everything else are at risk. You can purchase insurance, but an LLC is cheaper and has other benefits.

Sole-Props pay more in taxes: All income is subject to federal employment taxes of 15.3%. With a company, after a reasonable salary, the remaining profit is not subject to federal employment taxes.

Inability to expand: You cannot sell a percentage nor offer it to employees. If you borrow money, the bank will require a personal guarantee. You will be required to make payments whether your business is making money or not.

Not Professional: Companies, vendors, clients, and others consider an LLC or Corporation more professional to do business with.

Sole-Props make estate planning more difficult:and die with their owner. The sole proprietor cannot deduct things like defined-benefit pension plans, insurance expenses, and health-care benefits. It is also difficult to attract good management to a sole proprietorship.

Filing for a DBA has the same filing fee as forming a company. Why pay the same only to receive so much less?


When you use us, everything is handled online, costs start at $99plus state fees, and we offer a same-day filing guarantee for orders placed before 5 P.M. in our time zone. When you are ready to start your company, simply click the order form button on the upper left. Learn more on our pages about forming a Wyoming LLC Colorado LLC and New Mexico LLC.

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