Home Improvement Contractor - Licensed Contractors
Whats better Sole proprietorship or Limited Liability corporation?
Ok there's this big company that is willing to hire my husband as a contractor but the requirements are for my husbands company to be an LLC. My question is why do they want us to be LLC? and What is better Sole proprietorship or LLC And please explain why? Its for a flooring company he installs floors.
Public Comments
- to limit their liability in case he screws up
- i don't know the difference between a sole proprietorship vs an LLC. i do know that if more companies will hire you because you are an LLC that you should consider it just because it will improve your opportunities to be considered and/or hired for more jobs
- And LLC is set up so that if someone sues the company, they can only take the company's assets and aren't able to go after any of your own personal assets. With a Sole Proprietorship, they can sue the pants off you and take your house (if needed). I just started my own business and it's an LLC. Large businesses are always LLC (such as Comcast). Hope that helps!
- With a Limited Liability Corporation (LLC) the owner has protection of limited liability whereas a Sole Proprietorship has unlimited liability for the the owner. For example, if there is a lawsuit brought by the customer for faulty service or product, personal assets cannot be attached in the event of an award. A Sole Proprietorship exposes all personal assets of the business owner. Both types of businesses are reported on the owners 1040 tax return. And while we are at it, it would be a good idea for the LLC to be filed with your state's corporation division in both your and your husband's name as owners. This protects the business assets in the event of an untimely death of either party. Also makes continuity of the business less eventful. If there is a chance for government contracts, 51% of the LLC should be titled to the female or minority member, if applicable. There is preferential grants/awards to those ownership types.
- The LLC protects his personal assets in the event of a mistake. Also, there are some tax advantages, such as writing off more expenses before paying taxes.
