I recently announced that Abigail Schmidt Photography is now an LLC. I’m going to give a basic explanation for what that means for my business and what it means for me as an individual. I don’t want to get too deep into it or make it too confusing, so I will keep this pretty short.
LLC stands for Limited Liability Company, which is just a type of business entity. Other types of business entities include Sole Proprietorships, Partnerships, or Corporations. Larger businesses are typically Corporations whereas small businesses with only a few employees are Sole Proprietorships, Partnerships or LLC’s. Each classification of business entity has its own legal requirements and registration fees involved.
Before I go any farther, I want to emphasize that if you are going to do business that involves any kind of transactions, you really should be registering your business with the county or state and keeping records so you do not get in any legal trouble!
So what are the benefits to becoming an LLC? I am the owner of my photography business, but registering it as an LLC separates me as an individual from my business. This means that my personal assets and the assets of the business are separate. If, for any reason, somebody wanted to press charges against my business, my personal funds and belongings would be safe and they would only be able to have access to what the business owns. As far as functionality goes, an LLC isn’t much different from a Sole Proprietorship. You pay taxes as an LLC pretty much the same way you would as a Sole Proprietor.
If you are a Sole Proprietor, you do not have the protection of being separated from your business. There is absolutely nothing wrong with being a Sole Proprietor, but you just need to consider the possible risks if there are any.
My business becoming an LLC, for me, was a satisfying big step! If any of you are considering starting a business, becoming an LLC is a great option!
Have a happy Monday!
Δ Abbi