I run three small side gigs: freelance writing, a vintage t-shirt shop, and occasional handyman work. My buddy keeps telling me I need an LLC for each one to 'protect my assets.' That sounds like a ton of paperwork and fees for not much revenue. Am I crazy for thinking one LLC or even just a sole prop is fine?
Side Hustles
Separate LLCs for separate side hustles might be excessive
Your buddy sounds like he sells LLC formations on the side.
Not crazy. Separate LLCs make sense when each venture has significant liability exposure or you have partners in one and not the others. For writing and t-shirts? Overkill. Handyman work is the only one with real injury risk, so maybe just one LLC covering that, and keep the others as sole props or under a single umbrella.
I have two LLCs and honestly the annual report fees alone annoy me. Unless you're pulling in serious money or have employees, it's often just extra admin. Also, commingling funds across LLCs can pierce the veil anyway, so more entities doesn't automatically mean more protection.
How much revenue are we talking? If it's under like $15k each, I wouldn't bother. The tax prep costs alone would eat the benefit.
Roughly $8k writing, $5k shirts, and maybe $3k handyman per year. So yeah, small potatoes.
Then definitely not. Your buddy is giving you advice from a YouTube thumbnail.
Yeah, with those numberss, a single LLC (or even just an umbrella policy for the handyman stuff) is plenty. Separate LLCs would just triple your compliance headache for zero practical gain.
Also, if you're doing handyman work under an LLC but personally swinging the hammer, plaintiffs can still sometimes go after you individually for negligencbe. LLC isn't a magic shield for your own actions. Insurance matters more.
This thread is making me feel better about my one-LLC-for-everything setup. I was starting to think I was the weird one.
I'm the buddy in question and I stand by my advice. But als I enjoy paperwork. So maybe don't listen to me.