LLC vs Sole Proprietor: What’s Best for Freelancers & VAs in 2026

Get started with LegalZoom to form an LLC when you’re ready to move beyond a sole proprietorship and set up your business the right way here: https://startupwise.com/legalzoomllc/ Get started with Mercury to open a business bank account and keep your freelance or VA income separate from your personal finances here: https://startupwise.com/mercury/ In this video, I go over LLC and sole proprietor and explain which business structure is best for freelancers and virtual assistants in 2026. A sole proprietorship and an LLC both allow you to start working and getting paid, but they differ in how they handle liability, taxes, and long-term growth. If you are freelancing or offering VA services and are unsure whether to stay a sole proprietor or form an LLC, this video breaks down exactly what each option means and how it affects your business. Our favorite business must-haves: 💳 Best business credit cards: https://startupwise.com/creditcards 🏦 Novo (best business bank): https://startupwise.com/novo 🖥️ Best AI website builder ($3/month using code STARTUPWISE): https://startupwise.com/hostinger/ ⚙️ Northwest (best $39 LLC formation service): https://startupwise.com/northwestLLC 💰 Payroll with Gusto (get 2 months free!): https://startupwise.com/gusto 👨💼 Best overseas staffing agency (save 80% on payroll): https://paired.so/startupwise Be sure to watch this video until the end, because I’ll walk through the real differences between a sole proprietorship and an LLC, rather than giving vague advice like “just form an LLC.” Unlike generic explanations that ignore income level and risk, this breakdown shows when a sole proprietorship actually makes sense, when an LLC becomes the smarter move, and how taxes, liability protection, and credibility change as your freelance or VA income grows. Choosing between an LLC and a sole proprietorship depends on where you are in your freelance or virtual assistant journey. This approach works because it follows a simple framework: start simple while testing your services, add protection as your income becomes more consistent, and choose the structure that supports your long-term goals. Use this comparison to decide whether remaining a sole proprietor fits your current situation or whether forming an LLC is the right next step for your business in 2026. If you found this video helpful, be sure to check out our other videos on: Top 5 Virtual Assistant Niches That Pay the Most in 2026: https://youtu.be/I7lx37d99K8 How to Start Working Remotely with No Experience: https://youtu.be/zmLoMs7uy84 Request New Videos Here: https://forms.gle/k9TtfauggkEpAWNQA More tutorials on our website: https://www.startupwise.com Thanks for watching! I hope you have a wonderful day! – Maria #VirtualAssistant #LLC #SoleProprietorship Timeline: 0:00 - Introduction 1:04 - What Is a Sole Proprietorship? 2:18 - What Is an LLC and How Does It Work? 3:19 - LLC vs Sole Proprietor Key Differences Explained 4:06 - Conclus Disclaimer: Some of the links above may be affiliate links, meaning I may receive a small commission if you click on them. The commission is paid by the retailers at no cost to you, and this helps to support our channel and keep our videos free. Thank you! All info from our videos is compiled from online sources and our own experience, and we encourage you to do your due diligence. We appreciate your viewership! In addition, we are not financial advisors. StartupWise does not provide tax, legal, or accounting advice. The ideas presented in this video are for entertainment purposes only. Please do your due diligence before making any financial decisions.