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California LLC or Sole Proprietorship??

I am having some difficulty with the LLC vs sole proprietorship for my state. I live in California. I I've been doing a lot of research on this topic and learning the differences between LLC and sole proprietorship. I'm wondering if LLC is the best way to go because it protects me personally if I were to get sued by someone. However if I decide to go with the sole proprietorship is there some sort of insurance I can get to protect me personally if some issue were to arise? I do not understand which option is best to do for a small business. Is there any insurance that I can get for an LLC and for a sole proprietorship or only one or the other? Any other Californians or anyone else, I would love some clarification on this. Its stopping me from moving on in my checklists because it is overwhelming and hard to understand. Thank you for taking the time to help me with my question!

Comments

  • Leslie DiazLeslie Diaz Enrolled Posts: 15
    Hi, Olivia, I am also very new to this and also live in California. You will have a release form for your clients to sign, before you begin any work, with either a Sole Proprietorship or an LLC. Starting out I don't think that the LLC is necessary but it does protect your assets as they cannot be touched if someone were to sue you as an LLC. The release form should do the trick but if you have a lot of assets and it concerns you, the difference is that you will have to go through the State rather than your city and the fees would be considerably higher, depending on what amount of money you bring in (to my understanding). I just got my Sole Proprietorship business license and my DBA license yesterday, thinking that if/when I get to a point when I feel the LLC is necessary, whether it be in a few months, maybe a year, I will do it then. Hope this helps.
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