Chapter 3: Entity Types
Having an LLC is literally always a good idea, even if you’re a freelancer, or have some type of passive income stream. Because of the limited liability structure, if you have assets in two different LLC’s and one of them gets in trouble, the assets in the other LLC will be safe. Conversely, if those assets were owned personally and you got in trouble, everything would be on the table for the taking. I personally like to keep each of my different income streams in separate LLC’s. This is obviously good for liability protection, but also drastically aids in accounting and taxes, since each income stream has its own bank account, revenue, and expenses clearly separated from each other. LLC’s make loads of sense for freelancer’s too, since mixing personal and business expenses can get messy at the end of the year. The liability protection will also help shield you if an angry client tries to come after you for any reason.