Do I need an LLC?

An LLC (limited liability company) is one way to structure a business. It can separate your personal assets from business liabilities in many cases—but whether you need one depends on your situation, location, and risk tolerance.

Some businesses operate as sole proprietorships without forming an LLC first. Others form an LLC early for liability protection or because a client or lender requires it. There is no universal answer.

Questions to consider

• How much personal liability risk does your business type carry?
• Do you have partners or investors?
• What does your state require for your industry?
• What do your customers, landlords, or insurers expect?

For specific legal advice about your situation, talk to a licensed attorney in your state.