[kjksf]

It's also worth noting that you don't need an LLC to "channelize your creative endeavors".

You can take money from other people for goods and services you provide without any legal structure behind it. IRS has forms to report such income (and related business expenses).

A step-up is a DBA registration in your city hall. It's still just you, nothing changes from point of view of IRS, you can just use a name for your business that is different that your own.

An LLC is a significant step-up in terms of complexity and cost and many people cargo cult it (i.e. they think they need an LLC for reasons they can't put into words but it's something what other people are doing).

[theturtletalks]

LLC stands for limited liability company. What makes it different than a DBA is that a LLC gives you limited liability. If your LLC is sued, you're protected personally from losing assets. Regardless, many people don't need it and a DBA suffices until the liability gets too high.

[PopeDotNinja]

> If your LLC is sued, you're protected personally from losing assets.

A lawyer friend once told me that anyone can sue anyone at any time for anything. A good lawyer will sue the LLC and the owner of the LLC. Even if the defendant is found to not be liable, it won't feel like a victory when the invoice from the defendant's attorney arrives.

[bsamuels]

You also have to pay $800/year in franchise tax if you run an LLC in California, regardless of income. If OP is just making an etsy or something, he does not need an LLC.

[m0zg]

While true, for solo LLCs in particular such "protection" can be incomplete. I'd advise folks to consult with a lawyer before embarking on anything risky.

[WillPostForFood]

If you have no assets then you may not have anything to protect and an LLC can be a waste. But if you have a family, a house, and some savings to protect, then it is very easy to put into words why an LLC is important. LLCs are cheap and easy insurance. Where I might agree about cargo cults is the Delaware Corp.