I have a lump in my throat just writing this query, but, when my good friend came to me in search of tax advice, I could not think of a better place to turn than to the dynamic duo whose podcasts, emails, and YouTube videos truly never get old. So here goes:
Friend is a house painter and insists that she can be structured as a sole proprietor in order to avoid the administrative requirements of maintaining an LLC (registering with the state, filing a BOI, etc.). When I told her about the unlimited personal liability, she says that she has a $2M business insurance policy. To be fair, she is a small business, so her family’s net worth is probably less than $2M, but my question for Mark and Mat (or is it Mat and Mark?) is as follows:
Is she correct in that an adequate insurance policy that negate the benefits of structuring as an LLC?
Thanks, both!