Advantages to an LLC? and other business-y questions

[Betty]

After being laid off last year, I've done a little freelance work (web design and print advertising) that seems to be picking up steam a bit.

I see others, including NA for her latest business, has formed an LLC.

I'm wondering if there are any advantages to me doing that as opposed to being a sole proprietor (is that what I am?) I suspect I need to get that straight and become more legit business-wise.

Do you have any advice on this? Is it easy to form an LLC if that's what I should do?

[Not Afraid]

My primary reasons for forming an LLC were:
a) I own property and other assets didn't want to put my personal property at risk if we were to get into legal action of any sort
b) I have business partners and wanted protection there too.

As the name implies, an LLC provides limited liability to its owners (technically called 'members'), meaning that any liability created by the company is limited to the company. The members' personal assets are protected from all claims against the company.

There are also tax ramifications which I'm still sorting out. Try talking to your tax guy in March or April and let me know if you can get through. ;) I'm still a Sole Prop for my jewelry company. My CPA is going to earn his dollar for 2012.

[Betty]

Thanks NA. That's what I was grasping from the description as well. Protect your assets / different tax structure.

Did you need a lawyer to form it?

[Not Afraid]

You can do it yourself or use a company like Legal Zoom to deal with the process. It will cost a bit more to have it some but it will be done correctly.

[Ghoulish Delight]

Which leads to the only advice I'm qualified to give. In case you don't listen to any podcasts that are sponsored by LegalZoom, it would help you to know that you can use the promotional code "bangbang" (or one of several other codes from different podcasts) and get a discount.

[Betty]

Excellent GD. I do not and will use that if I go that way. :snap: