What is an LLC and do I need one?
An LLC (Limited Liability Company) is a business structure that gives you two things a sole proprietorship doesn't:
Personal liability protection. If your business gets sued or owes money it can't pay, your house, car, and personal savings are protected. The lawsuit goes against the LLC, not you.
Tax flexibility. By default an LLC is taxed like a sole proprietorship (pass-through to your personal return), but you can elect to be taxed as an S-Corp at any time.
Do you need an LLC?
There's no single bright-line rule — it depends on your income, risk exposure, and goals. An LLC is usually worth it if any of these are true:
You're earning steady, meaningful income from the business (not just occasional pocket money)
You have employees or contractors
You're signing contracts with clients
You sell a product that could cause physical harm (food, fitness, equipment, etc.)
You'll be applying for a business bank account, loan, or credit card
You want to keep business and personal finances clearly separated
You probably don't need an LLC yet if:
You're freelancing as a small side hustle with no clients or contracts and minimal income
You're testing a business idea and haven't made any money yet
Every situation is different — for a recommendation specific to your income, industry, or liability exposure, talk to an attorney or CPA. If you just want to talk through your situation in general terms, chat with us via the messenger in the bottom-right corner.
What does an LLC NOT do?
It does NOT protect you from your own personal misconduct (fraud, negligence, criminal acts).
It does NOT eliminate self-employment tax on your earnings unless you elect S-Corp treatment.
It does NOT replace business insurance — you still need general liability + professional liability coverage.
How long does formation take?
Two clocks run on every order. First, how fast we file it: standard filing is submitted within 1-4 business days, expedited is submitted the same business day. Second, how fast your state reviews and approves it once filed — and that varies a lot by state, from immediate/same-day to several weeks.
For your specific state's typical review time, see How long does each state take to approve an LLC? (state-by-state).
What's next?
Ready to form? Start here: https://www.formationhub.com/
Still deciding? Chat with us via the messenger in the bottom-right corner — happy to talk through your specific situation.