Web Reference: Aug 11, 2025 · Legally speaking, forming an LLC (Limited Liability Company) is optional for starting a business in the U.S. – you can operate as a sole proprietorship or partnership without ever creating an LLC. There is no federal or state law requiring a small business to be an LLC. Oct 9, 2025 · Learn what an LLC is, how it is classified for federal tax purposes, and how to change its classification. Check with your state for the requirements and regulations of starting an LLC. Forming an LLCgives your business its own legal identity. In the eyes of the law, it's a separate “person" that can own money and property, have a bank account, make agreements, sue people, and be sued. Because of this, your business' creditors generally can't go after any money or assets that aren't owned by the LLC. Your home, bank account, and o...
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