5 Reasons Why You as a Freelancer Should Form an LLC

Publicist Team

An LLC, or a Limited Liability Company, is a business structure that protects independents from personal responsibility and obligation of the business’s associated liabilities. 
Without a significant cost to form an LLC, and with limited restrictions as to who can sign up for one, there’s little to no reason why a freelancer shouldn’t at least consider it as an option. In what follows, we’ll be detailing the top 5 reasons why you as a freelancer should consider forming an LLC for your business. While it’s certainly not the only option, it’s the likely first step for furthering operative development and ensuring greater financial security. As a freelancer, this should be music to your ears! With that said, let’s get into the five reasons why you should form an LLC as an independent freelancer, both part-time or full-time.

Why You Should Form an LLC as a Freelancer 

Whether you’re a part-time or full-time freelancer, you can likely benefit greatly from forming an LLC. Like anything, it doesn’t come without its disadvantages, however, as most would agree, the ease of setup and the benefits it provides make it all but necessary to form.

We here at Publicist understand that this is a big step in your entrepreneurial journey. That’s why we’re here to guide you every step of the way. With that said, below are reasons why you should consider it! 

Five Reasons Why You Should Form an LLC:

  • Boost Your Professional Image

  • Increased Credibility and Authority in the Space

  • Provides Flexibility with Tax Obligations

  • Protects You from Liability

  • Streamlines the Accounting Process

  • It’s Simple and Easy to Set Up!

 Boost Your Professional Image 

As a freelancer, you likely understand how important your public image is. After all, you’re the sole individual that clients are placing their trust in. Well, by forming an LLC, not only are you provided with the opportunity to create a company name but with the opportunity to create an identity around it. 

From a professional website and business cards to invoices and contractual agreements using your company name, forming an LLC for your freelancing business inherently boosts your professional image.

The end result is more credibility, authority, and trust, ultimately leading to more prospective clients, larger clients, more sales, and an overall enhancement to your freelancing portfolio. 

Provides Flexibility with Tax Obligations 

Under an LLC, you as a freelancer (and now business owner) have the flexibility and control to choose the taxation structure that best suits your circumstances. Why is this beneficial?

Simply put, it can reduce tax obligations, increase tax savings, and ultimately allow you to take home a larger portion of your earn revenue at the end of the day. Taxes are one of the largest hurdles for most freelancers, so by taking greater control of the situation, you alleviate that hurdle and increase your business’s profitability. 

Without getting too detailed, having an LLC can provide several tax benefits, helping you avoid corporate tax and ease the tax obligations at large. 

Protects You from Liability 

Because freelancing is largely an independent endeavor, contracts and agreements with your clients, both new and existing, place 100% of the liability on you and your personal accounts. Should anything go south during a given contract, your personal assets and reputation are up for grabs. 

By forming an LLC, however, all contracts and agreements will be signed under your company name. On the contrary, should anything go south during a contract under an LLC, all personal assets are protected. Even more, while you’re unable to do so as an independent freelancer, under an LLC you’re allowed to purchase business liability insurance which further protects the company even under the most inconvenient of circumstances. The result? A win-win situation that protects both you and your company under scrutiny.

With that said, let’s hope it never gets to that point…

Streamlines the Accounting Process 

During the formation of an LLC, you as a freelancer will be provided with a unique identification number known as an EIN. This allows you to open a separate business account where all business activities and expenses can be managed. 

Not only does this streamline your finances and make it easier to track funds, but it also makes it easier to claim tax deductions during tax season. We all know the headaches that come with freelance taxes… Take the stress off of your shoulders by forming an LLC and opening up a business account; you (and your accountant) will thank yourself later…

It’s Simple and Easy to Set Up

While many shy away from adding more complexity and professionalism to their freelancing business, forming an LLC couldn’t be easier of a process; don’t get intimidated by the business terminology involved…

It is understandable while some may prefer not to form an LLC; after all, many get into freelancing to distance themselves from corporate structures and obligations. However, forming an LLC also makes it easier for you to operate your business.

Easy to set up and even easier to operate, just submit some paperwork and you’re off to the races…It’s another win-win! 

Publicist helps those looking for top talent in the fields of marketing, communications, and creation. Whether in-house, remote, or freelance, you can proceed with confidence knowing that it’ll be a successful and streamlined process! 

Publicist is a full-service marketplace comprising only the highest level of talent across disciplines. As an industry-leading platform, we pride ourselves on being a one-stop-shop for finding the most suitable talent for your business or project. 

Whether you’re a talent yourself or a business looking to hire, Publicist is the platform for you! To sign up, click here!