Need advice on a Business License

Apr 23, 2021


I am starting a freelance eLearning business.  For those of you out there, what type of business license did you acquire?  I am leaning towards sole proprietorship but also know that LLC gives you more personal asset protection.  If its just me I feel like the sole proprietorship is appropriate.


Also not sure which discussion board to post this to.

4 Replies
Judy Nollet

Hi, Keithia,

The attached PDF contains an article I wrote about this topic back in 2002. It includes input from two dozen colleagues who represented a range of business types. I hope it provides some help as you consider how to proceed. 

My state (MN) provides an excellent guide to starting a business that I found very helpful when I began freelancing.  Of course, things vary by state. I suggest you check your state's website to see what they provide. 

Finally, I'll offer what I consider important advice if you do become a sole proprietor: Establish a legal business name, set up a bank account in the business's name, and be sure you always save enough of your earnings to pay your estimated taxes (Fed & State income taxes, plus the employee AND employer FICA taxes). 

Good luck!

Judy Nollet

Hi again, Keithia,

I'll add one more note: There may be some companies who will not work with a sole proprietor.

That decision is typically made because they want to avoid the risk of a contractor coming back at them with a claim that they were really an employee. In other words, they want to pay a company, not an individual (even if that individual has a doing-business-as name). 

I think this has become more of an issue since I wrote the article I attached in my comment above. 

So, even though being an LLC requires additional paperwork and stricter accounting practices, it might be worth it.