Complete Guide to LLCs

Going solo in business? You'll still want legal armor. Here's what most first-time founders miss: operating as a single member LLC costs roughly the same as staying unregistered, yet it keeps creditors away from your personal bank account. I'm talking about freelance graphic designers, Etsy sellers, landlords with a few rental units—anyone making money without partners who'd rather not risk their home equity on a client dispute.

What Is a Single Member LLC?

Picture your business as a bubble. Inside that bubble lives everything related to your company—the equipment you bought, the contracts you signed, the debts you owe. Outside that bubble sits your personal life: your car, your savings account, your kid's college fund. That's exactly what a single member LLC creates: one owner (that's you), with clear boundaries separating business from personal.

Contrast this with sole proprietorship, where no bubble exists. You and your business are legally identical. When someone sues your business, they're suing you. That client who claims your consulting advice cost them $50,000? They can pursue your house. The vendor demanding payment on an unpaid invoice? Your personal checking account is fair game.

Here's something that confuses people: "single member" describes ownership stakes, not headcount. You can hire ten employees, contract with twenty freelancers, and operate five different revenue streams—as long as you own 100% of the membership interest, you're still a single member LLC. Sell ...