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 or C-Corp at any time.
Do you need an LLC?
You probably need an LLC if any of these are true:
You're earning more than $5,000/year from the business
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 if:
You're freelancing as a side hustle earning under $5,000/year with no clients or contracts
You're testing a business idea and haven't made any money yet
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?
Depends on your state. Most states approve LLC filings in 5-15 business days. Some (Colorado, Indiana, Kentucky, Missouri) are same-day. Some (Arizona, Maine, Pennsylvania, Texas) can take 2-3 weeks.
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.