Episode 156: How Can I Protect Myself as a Virtual Assistant? Sole Proprietor vs. LLC

Full Episode Transcription:

(00:07):
Hey, hey friends. Welcome back to the Ditch the Classroom podcast and another episode of Quick Tip Thursday. Before we jump into today’s question, I have something super exciting to let you know about my book, “Teacher Turned …” Will be launching February 20th. So exciting. Never really thought I was gonna write a book, but when God tells you to do something, you gotta do it. So we will be having a five day giveaway the week of February 20th through 24th to celebrate the book launch. So I’m super excited about that as well to just give back to you guys for helping the support this book and get it to reach even more people. So I will be having more details about the giveaway coming soon, but I just wanted to let you know that it’s coming.

(02:09):
All right, so today’s question is, how can I protect myself as a virtual assistant? Which route is the best way to go? Sole proprietor or LLC? Now, I am not a lawyer, so please do your own research and if you need to hire someone to help you, you can do that. But here’s what I recommend. As a sole proprietor, it’s a lot easier to get that set up. There’s less paperwork involved, and some states you may not even need to file any paperwork. Some you may just need to file a “doing business as” is what it’s called. But the drawbacks to being a sole proprietor is that there’s no personal liability protection. So if a client were to try to sue you, it would go after your personal assets and you wouldn’t really have any protection there.

(03:06):
Now, does a client usually sue? No, that’s a very, very rare but sole proprietor will not give you that protection if they were to. Now with an LLC, you’re not personally on the hook. If you were to be sued, your personal assets are not on the hook, but your business would be. So each state has different fees and requirements for filing in LLC. So what I recommend is to go to Google and look up the name of your state and then LLC filing, and then find your state government’s website. Don’t look at all the other 10 million websites that’ll pop up on Google. Find your state’s government website and their LLC filing instructions. One drawback of registering as an LLC is that it is a bit pricier. What I typically recommend is to sign up as the sole proprietor just for like your first one or two clients, and then when you have that income, get the LLC.

(04:07):
Now, shameless plug here, in TTFA will literally help you figure out what requirements your state has. I know a lot of people get hung up on this and they just don’t even end up pursuing virtual assistance anymore because they get overwhelmed with what their state requirements are, and I don’t want you to do that. So as a part of the Teacher Turned Freelancer Academy, you can come into our student community, drop the state that you’re filing in, and I will help you figure out what your requirements are. I’m always giving you guys that extra support you need to be successful as a virtual assistant, and that is why the Teacher Turned Freelancer Academy is your best bet to become a successful virtual assistant. So go to teacherturnedfreelancer.com so you can sign up there. And let me just recap real quick.

(04:57):
So sole proprietor, they are easy to set up, there’s a lot less paperwork, but there’s no personal liability protection. And then with an LLC, your personal assets are protected, but it is a bit pricier to get registered and it’s a little bit more complicated. All right, so I hope that was helpful for you guys, helped you make a little bit more decisions, just pick one and go with it. Don’t overthink this too much, and if you have a question that you would like me to answer here on the Ditch the Classroom podcast, go to our Facebook community facebook.com/groups/ditchtheclassroom. Scroll to the quick tip Thursday post and drop your question there. I would love to answer it for you. All right y’all, we will see you next time.