Many small businesses get their start as a sole proprietorship. After all, it’s the default business structure. If you’re a single business owner and never filed any official formation paperwork with the state, then you’re operating as a sole proprietorship.
There comes a time when a sole proprietor wants to formalize the business. Perhaps you realized that your side hobby is now a legitimate and blossoming business. Perhaps you realized that operating as a sole proprietorship puts your personal savings and assets at risk should your business incur any debt or be sued. Or maybe you want to take on a new client who requires you to operate as an LLC or corporation.
