It is pretty natural for people to start their businesses as sole proprietors. Most often, the reason behind starting a business with such a model is that they do not want to plan the business properly. Instead, they just want to start selling services or products right away.
Likewise, some just do not want to go through the effort or put in the cost of incorporating unless they know that the business is viable or not. But you know that you need to incorporate it at one point, right?
When Should You Convert from Sole Proprietorship to LLC?
Generally, people will make the switch from a sole proprietorship to an LLC if they find the requirement of one or more factors of the following:
When you are rolling with sole proprietorship, you are your business. In other words, all legal issues and debts are your concerns. However, your business becomes a separate entity when you shift to an LLC.