Forming an LLC doesn't make separating finances any easier. It doesn't help you do it or help you force yourself to to do it. My objection is specifically to the claim that it helps you do anything. It doesn't.
Also, you should separate finances as a sole proprietor too.
An LLC does help with getting a proper EIN and DUNS number which helps greatly in establishing trust in a relationship with a new client.. Yes it absolutely helps with accepting payments.. having an EIN is necessary in many cases..
> "An LLC does help with getting a proper EIN"
No it doesn't. Sole proprietors get EINs just fine. It's literally the first option on the first page of the application. <a href="https://sa.www4.irs.gov/applyein/legalStructure" rel="nofollow">https://sa.www4.irs.gov/applyein/legalStructure
> "and DUNS number"
No it doesn't. Sole proprietors can get DUNS numbers just fine. It's literally the first option when you tell them how your business is structured right after telling them your name and email address.
> "Yes it absolutely helps with accepting payments"
A billion people accepting payments in every possible form without being incorporated say that you're wrong. No method of payment processing, from credit cards to memecoins, cares whether you're incorporated.
> "having an EIN is necessary in many cases"
Again, getting an EIN and forming an LLC are completely unrelated.
You can certainly use all of those mediums via consumer fintech, but you will often find yourself limited to products which are designed for consumers, and many B2B service providers may refuse to work with you.
Nobody said consumer fintech? You can just operate as a business. "Sole proprietor" is a real thing that almost every service knows how to deal with, and if one can't there's a competitor willing to right next door.
"Sole proprietor" is a real thing that many B2B services deal with by throwing your application in the trash.
Yes, you can go get a personal loan, or a retail banking account, or a personal payment processing account, but as I said, you're going to be locked out of a lot of B2B products.
Sure. If you absolutely need one of those services then you do the thing. Most of the time there are alternatives, IME.
Example, since you edited to add examples: I have several business bank accounts and far too many Stripe accounts all registered as sole prop. I haven't had to take a loan but I do have a sole prop credit card. My understanding is that even with an LLC a bank is going to require a personal guarantee for a loan.
Some vendors will only deal with companies (of all types) and refuse sole proprietors as customers, either because they don't know how or because they judge you as unserious. This comment is based on an actual experience I had.
That's very sweet! But I recommend subscribing to me only once, not every time I write a comment. Otherwise you'll end up with thousands of duplicate subscriptions.
BugsJustFindMe · · focus · HN ↗
No it won't.
> "it’ll help you accept payments"
No it won't.
> "or sign up for a bank account"
No it won't.
An LLC doesn't make those things any easier than they already are (very easy) as a sole proprietor.
An LLC only does the liability thing. And that's fine. Just don't make other things up. You don't need to.
eadwu · · focus · HN ↗
What it does do is that since it provides a rigid structure, it compels law abiding citizens to do those actions, not forcing still.
You would have a hard time proving liability if you didn't have separated finances.
BugsJustFindMe · · focus · HN ↗
Also, you should separate finances as a sole proprietor too.
poody · · focus · HN ↗
BugsJustFindMe · · focus · HN ↗
No it doesn't. Sole proprietors get EINs just fine. It's literally the first option on the first page of the application. <a href="https://sa.www4.irs.gov/applyein/legalStructure" rel="nofollow">https://sa.www4.irs.gov/applyein/legalStructure
> "and DUNS number"
No it doesn't. Sole proprietors can get DUNS numbers just fine. It's literally the first option when you tell them how your business is structured right after telling them your name and email address.
> "Yes it absolutely helps with accepting payments"
A billion people accepting payments in every possible form without being incorporated say that you're wrong. No method of payment processing, from credit cards to memecoins, cares whether you're incorporated.
> "having an EIN is necessary in many cases"
Again, getting an EIN and forming an LLC are completely unrelated.
kube-system · · focus · HN ↗
BugsJustFindMe · · focus · HN ↗
Credit card? No. ACH? No. Wire transfer? No. Cash? No. Crypto? No. Check? No. IOU on a napkin? No. Pokemon card? No. Sex? Weirdly illegal in most places, but still no.
...uh...which ones did I miss?
kube-system · · focus · HN ↗
zrail · · focus · HN ↗
kube-system · · focus · HN ↗
Yes, you can go get a personal loan, or a retail banking account, or a personal payment processing account, but as I said, you're going to be locked out of a lot of B2B products.
zrail · · focus · HN ↗
Example, since you edited to add examples: I have several business bank accounts and far too many Stripe accounts all registered as sole prop. I haven't had to take a loan but I do have a sole prop credit card. My understanding is that even with an LLC a bank is going to require a personal guarantee for a loan.
someonebaggy · · focus · HN ↗
jan_m_savage · · focus · HN ↗
kirubakaran · · focus · HN ↗
jan_m_savage · · focus · HN ↗
BugsJustFindMe · · focus · HN ↗
jan_m_savage · · focus · HN ↗
BugsJustFindMe · · focus · HN ↗
IncandescentGas · · focus · HN ↗
An LLC will require you, under civil or criminal penalty for non-compliance, to separate personal and work finances.