Not legally required — you can operate as a sole proprietor. But an LLC separates your personal assets from business liability, which can protect your home and savings if the business is sued.
You can freelance or run a business as a sole proprietor with no formal entity — it’s the default. The main reason people form an LLC is liability protection: it creates a legal separation between your personal assets and the business, so a lawsuit or debt against the business generally can’t reach your personal home and savings. LLCs also offer some tax flexibility and can look more credible to clients. Whether it’s worth it depends on your liability exposure and income.
Generally yes — it separates business liability from personal assets, though the protection can be lost if you mix finances or sign personal guarantees.
A single-member LLC is taxed like a sole proprietorship by default, so taxes are often similar — but an LLC can elect different treatment as you grow.
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