What is better for a hair weave extension business – an LLC or sole proprietorship?

UPDATED: Oct 1, 2022

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What is better for a hair weave extension business – an LLC or sole proprietorship?

I want to start my own hair weave extension business selling weave online. I

don’t want a store just yet so online is best for me. Before I dig more into my

business plan I want to get advice on what type of business should I go with,

LLC or sole proprietorship. From my knowledge, an LLC is making your business a separate entity, what my business makes is money for my business and not my personal income but I can put myself on payroll to get paid from my business. My businesses taxes are different from mines. With sole proprietorship there are no legal separations between my business and I. I will be responsible for the debt of my business, if something does wrong I am responsible for it because there is no separation between my business and my personal assets. With the type of business I want to start what would be better? I plan on getting funding from other places and use as little as I can of my income to start this. I have a feeling an LLC is better but I may need help understand them both more.

Asked on October 22, 2018 under Business Law, Massachusetts


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 4 years ago | Contributor

LLC is the way to go for any business. An LLC, or "limited liability company," makes the business a separate legal entity or "person" from yourself: that means that you are not responsible for the businesse's debts or obligations (e.g. a lease; a loan; equipment or supplies or inventory financing; etc.) unless you personally guaranteed them; it also means that if the business is sued for some reason, you and your personal assets are protected, unless you personally injured, etc. some other person, in which case you can be sued as the person causing the injury (and not because you are the business owner).
On the other hand, with a sole proprietorship, there is no separate business--you are the business, and are liable or responsible for all its debts and obligations, and if the business is sued, you are the person being sued.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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