6 Mistakes Freelancers Make When Setting Up an LLC

This article, 6 Mistakes Freelancers Make When Setting Up an LLC, was published on the Millo.co blog. Thanks for reading! Freelancing is on the rise like never before. In 2023, 73% of U.S. workers planned to freelance. An astonishing 46% of the global workfor…
Johnson Johnson LLD · 5 days ago · 2 minutes read


Freelancing: A Step-by-Step Guide to Setting Up a Successful LLC

Importance of Setting Up an LLC

For freelancers, an LLC offers significant benefits:

  • Protects personal assets
  • Enhances credibility
  • Provides tax advantages
  • Supports business growth

Steps to Set Up an LLC

  1. Choose a Business Name
  2. File Articles of Organization
  3. Create an Operating Agreement
  4. Obtain an EIN
  5. Gather Your Documentation
  6. Understand State-Specific Requirements

6 Mistakes to Avoid When Setting Up an LLC

Mistake #1: Choosing the Wrong Business Structure

Consider an LLC over a sole proprietorship or C-Corp for limited liability, tax benefits, and flexibility.

Mistake #2: Not Understanding State and Local LLC Laws

Research your state and local requirements to ensure compliance with annual reports, franchise taxes, and specific regulations.

Mistake #3: Skipping or Underestimating Insurance Needs

Secure insurance coverage for liability, property, and professional services to protect your business from risks.

Mistake #4: Mixing Personal and Business Finances

Establish separate business bank accounts and financial systems to protect your assets and simplify accounting.

Mistake #5: Ignoring Tax Obligations and Overlooking Possible Deductions

Understand tax requirements, pay estimated taxes, and maximize deductions to optimize your financial situation.

Mistake #6: Neglecting to Seek Professional Help When Needed

Consult with a lawyer and accountant to review contracts, establish a tax plan, and provide legal and financial guidance.

Branding and Marketing for Success

Establish a strong brand identity and marketing plan to differentiate your business, build credibility, and connect with potential clients.

Wrapping Up

By avoiding common mistakes and focusing on branding and marketing, freelancers can increase their chances of success as LLC owners. Continuous research, planning, and seeking expert advice are key to long-term business growth.

Bonus Quote: "The future of work is freelance. Embrace the flexibility, autonomy, and potential it offers." - John Brown, CEO of Millo

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