I'm starting a small handyman business and want to keep it simple as a sole proprietor. Do I need to form an LLC to get a business license, or can I just get the license under my own name? I'm in Ohio if that matters.
Licensing
Can you have a business license without forming an LLC?
You can usually get a license as a sole prop. LLC is about liability, not licensing. I run a cleaning service as a sole prop and have a city license. No LLC.
Depends on the city. Some places ask for your EIN or SSN, and they don't care about LLC status. But a few might require a registered business entity for certain licenses. Check with your local licensing office.
What doubtfully_otter said. The LLC is a legal structure, not a permission slip. You can be a sole prop with a license. The bigger question is why you'd want to stay sole prop for a handyman business—that's a lot of personal liability.
I've had a business license for 6 years as a sole prop in Ohio. Never formed an LLC. It's fine. But yeah, insurance is your friend.
Also, if you're doing handyman work, some counties require a contractor's license, which is separate from a general business license. That can have its own rules. LLC or not, you might need that too.
Wait, so what's the point of an LLC then? Just taxes? I'm confused now.
Liability shield. If someone sues you, they can't come after your personal assets (usually). Taxes are actually similar by default—an LLC is pass-through unless you elect otherwise. But it's not required for a license.
And some licensing boards might look more favorably on an LLC? Not sure. Probably not. But if you're hiring employees, an LLC can seem more 'official' to customers. Irrelevant to the license though.
I tried to get a license as a sole prop in Columbus and they wanted a copy of my lease and a notarized form. No LLC needed. Just annoying paperwork.
burnt_coffee_88, the point is not losing your house if you accidentally break a client's window and they decide to sue for emotional distress. But you do you.
Also, some cities have a 'business license' that's really just a tax registration. In that case, they'll take anyone with a pulse and a checkbook. LLC or not. It's the contractor license that's the real hurdle.
Got it. So license first, LLC later if I want. Thanks.
One more thing: if you're a sole prop, you might need to file a DBA if you use a business name other than your own. That's not an LLC, just a trade name. Easy to do.
And don't forget estimated taxes. Sole prop means self-employment tax. Not a license issue, but a wallet issue.