Should you operate as a Sole Proprietor or an LLC?

Posted by Jeremy Augusta on

Should my salon be a sole-proprietor or a LLC?

So you have decided to open a salon, that's awesome! Or, maybe you have been in the business for a but and you are wondering how your legal structure should be set up. Well, we're here to help you understand which is best for you. 

Benefits of a Sole-prop vs benefits of an LLC. 

Stylists who are early in their career doing booth rent will probably start out operating as a sole proprietorship. Being a sole prop is very straightforward, you work, you get paid you move forward.  You can just file your taxes as regular and for many people, that is a huge benefit because there is no need to learn tax laws or to hire an accountant. Being a sole-proprietor is an easy way to operate, but it does come with huge liability. If something happens in your salon, instead of taking legal action against your business where your personal property would have been protected, they can sue you directly. 

If you are operating as a sole proprietor, there is zero legal separation between your business and yourself, which I business or the case of legal action against your business, you personally liable for debts, lawsuits, and any and all other liabilities. You have to understand, being a sole-proprietor opens you up to having everything taken away from you if something unfortunate were to happen. The risk of being a sole-prop is that you can lose your business, your home your car and anything else you own, the reward of being a sole-prop is that you can save a couple of bucks on very easy to do legal forms. 

If you wish to operate as a sole proprietor, you must understand that the Risk>Reward

If you set your business up as an LLC, you are creating a legal separation between you and your business. If someone were to trip and fall in your salon and they were to sue, they could sue your business for its bank account and assets, but they couldn’t touch your home, your car, or any other personal property. 

If you are working in the beauty industry and want to see your profits increase, contact us today to discuss a wholesale account. 


If you are a retail professional and would like to see your sales and profits increase by offering our luxury products in your business, click here for more information.