Through two decades of small business development in the public and private sector, I have learned that the legal structure of small business ventures revolves around the entrepreneur’s desire to protect his/her assets, while having the flexibility to direct revenue to one’s personal income with the least amount of expense, and avoiding a lot of paperwork. Until a few years ago, the “either – or” debate revolved around proprietorship vs. an S corporation. The introduction of the simple Limited Liability Company (LLC) changed that debate to either an LLC or S corporation. Again, the emphasis remains on liability, ease of accessing revenue for income and avoiding paperwork.
For the purpose of this article, please note that we are addressing the condition of self-employment with no employees, and for good reason. According to a Small Business Administration (SBA) report issued in December 2004, there has been phenomenal growth of self-employment. In the year 2000 there were 11.5 million non-agricultural ventures in the U.S. That grew to 12.2 million in 2003 of which 2.9 million businesses were unincorporated.