Are there benefits for a single owner LLC vs sole proprietorship?

I don't have a company car and I'm not going to take the firm into debt. So I can't run over someone, nor would the banks have any reason to come after my money. If I mess up a drawing and someone sues me, my understanding is that is purely professional negligence and has nothing to do with the personal asset protection of being in a corporation. 

Are there significant tax benefits? (I know I should talk to an accountant.)

It's legal in my state to be a sole proprietor architect (the business license actually comes with the 'professional privilege.') I'm having trouble seeing why I should form an LLC although it seems like the cool thing to do. But I would get any coverage I need from insurance anyway?



Mar 6, 18 6:06 pm

a single member LLC is treated the same as far as taxes go.  

Mar 6, 18 7:20 pm

Imo it’s very little money and effort to set reason not to

As I'm bootstrapping my way in here it's at least $300 to set up the LLC, which isn't a lot but enough that I started this thread. I'll probably still end up doing it, but besides the nice letters by my name I can't find any real reason to do it. It does seem like a good idea for futureproofing firm growth.


If you're an LLC your creditors can't go after your personal possessions - they can only go after the firm's assets. 

Mar 6, 18 8:51 pm

LLC's are not allowed in CA or NY

Mar 6, 18 8:55 pm



I obviously meant to offer architectural services..


Architecture firms in NY are permitted to be PLLCs. A PLLC is a type of LLC. An architecture firm in NY that's organized as a PLLC is allowed to use "LLC" in its firm name, which has been known to lead to some confusion among those reporting firms for the presumed infraction.


You can easily check via the NYS corporation search...


I know. But I'm also aware from personal experience that being on that roster doesn't necessarily stop confused people from jumping to conclusions and filing unfounded complaints.


Here's the thing... if you are aware of the particularities, why expose yourself? In other words, if you know that regular LLC's cannot offer professional services, then even if PLLC's are allowed to call themselves LLC's, why even bother putting an LLC suffix in your firm name to begin with? I think that there is equal ignorance on the part of architects when starting a business and they rely too much on lawyers... same thing with architects' reliance on expediters. This stuff isn't rocket science...


Also, point me to where on the NYS website, does it say you are allowed to use LLC instead of PLLC?


The reason is usually that the firm does not want to use a different name in different states, and is already "Joe Architect, LLC" prior to taking on work in NY. I'm not aware that a NYS website states anywhere that a PLLC can call itself an LLC. That is probably one of the reasons that there is confusion. Nonetheless, it is legal to do so.


I made a S-Corp for myself. I have to pay $800 to CA every year, but it was the best and most flexible for payroll etc and for accepting payments for overseas projects. But yes, you need to talk to an CPA to get to the right answer.

Mar 6, 18 9:42 pm

llc protects your personal assets... client won’t be able to go after the roof over your head if the shit hits the fan

Mar 6, 18 11:15 pm

Depends on what kind of shit, correct? Under what circumstances would the LLC protect me?


LLC (as with any business entity type providing limited liability protection provisions) protects your personal assets from contractual based lawsuits. It does not completely relieve you from professional liability issues such as tort or negligence. Lawyers would pierce the "corporate veil" and personally name you in the lawsuit and get around the limited liability. Note: The more an LLC looks like a sole-proprietorship, the easier it maybe for them to negate the limited liability using whatever provisions of laws there is to get through it. That's why they are lawyers. You should always carry professional liability insurance (PLI). The LLC or even a corporation does not substitute PLI. Why would they pierce the "corporate veil" because usually LLCs have no tangible assets just a little bit of cash in the bank, especially one-member LLCs. If you a member to your LLC, it would help a little bit but only a little but most small business LLCs have little or no assets in the LLC so they will use every strategy they can to 'pierce the corporate veil'. Take note and study up on piercing the corporate veil. It gives the lawyers a hurdle they have to go through to get to you. Not an unsurmountable wall but a hurdle. A sole-proprietorship is NO PROTECTION. It means, they sue you, everything you own including the shirt and underwear you are wearing tangible assets. Ok, they probably won't take the clothes you are wearing but what you are not wearing is probably claimable including seizing your bank account capital and garnishment. In short, they take money you deposit into the account. You can't use banks to put away money. Your live will be a living hell straight into homelessness. (in a very bad case)


oneLOSTarchitect is partially correct. There are caveats. The LLC won't protect you under all cases. It will put a hurdle and limited liability can be pierced but not for contractual claims. It would usually have to be tort and negligence claims of a more severe instance. Remember the term "peircing the corporate veil". It applies to LLCs, PLLC, LLP, PLLP, S-Corps, and C-Corporations and any other business entity that provides limited liability protection.


I emphasize the issue of "piercing the corporate veil" so that you or anyone looking to LLCs to pay attention to the holes in the "limited liability armor" so that you can mitigate. Being a sole-proprietorship is going in with no armor.\

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