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Let’s clear this up once and for all. There are two different concepts people confuse all the time: 1️⃣ Sole Proprietor • No LLC • No legal separation between you and the business • You are personally liable for debts, lawsuits, and contracts • Income is reported directly on your personal return This is the default when you “just start a business” without forming anything. 2️⃣ Single-Member LLC (SMLLC) • A real legal entity formed with the state • One owner (you) • Provides liability protection
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