Every new year brings a fresh wave of big ideas or the resolve to finally move forward with the ideas that have been simmering for years. For many, that includes starting a business. If you’re wondering, “should I start an LLC in 2026?” you’re in the right place.
LLCs (limited liability companies) are one of the most popular business structures for entrepreneurs, freelancers, and small business owners. But that doesn’t mean it’s always the right move. In this post, we’ll walk through the pros, cons, and a few alternative options to help you make the best decision for your business goals.
Why LLCs Are So Popular
There’s a reason “start an LLC” is one of the most-Googled phrases every January. LLCs are flexible, affordable, and offer liability protection without a lot of red tape.
- Liability protection: Your personal assets (think house, car, savings) are generally protected if your business is sued.
- Tax flexibility: You can choose how your LLC is taxed: as a sole proprietorship, partnership, S-corp, or C-corp. You can learn more about the differences between an LLC and corporation here.
- Professional image: Having “LLC” after your business name can help boost credibility.
- Simple management: Compared to corporations, LLCs have fewer formal requirements and paperwork.
When Starting an LLC Might Not Be the Right Move
There are plenty of upsides, but LLCs aren’t a one-size-fits-all solution. Here are a few situations where an LLC might not be ideal:
- You’re testing a business idea: If you’re just in the idea stage or trying out a hobby business, you might wait until you’re more established.
- You want venture capital funding: Most investors prefer C-corporations for tax and equity reasons.
- You’re a solo freelancer with minimal risk: Operating as a sole proprietor may be more cost-effective (at least to start). You can compare LLCs vs. Sole Proprietorships here.
If any of those sound like you, don’t worry—we’ll cover your other options below.
Alternatives to an LLC
Not sure the LLC structure fits your business? Here are three other common business types:
- Sole Proprietorship: Easiest and cheapest to start. No legal separation between you and your business.
- Corporation (C-Corp or S-Corp): More formal structure, better for raising money, but requires more paperwork and compliance.
- Partnership: For businesses with two or more owners, this structure can work well—though an operating agreement is a must. Learn more about operating agreements here.
What’s the Best Option for You?
The right choice depends on your business goals, risk tolerance, and how much you want to deal with paperwork. That said, forming an LLC in 2026 is a smart move if:
- You want to separate your personal and business finances
- You’re earning income or taking on clients
- You want to protect your personal assets from business liability
- You’re ready to grow your business professionally
Ready to get started? While you can form your own LLC directly with the state (you can find links to every secretary of state here), we offer affordable packages to form your LLC. We make the process fast and simple, so you can focus on what you do best: growing your business. Need help? We make it easy to talk to a human. Give us a call at (855) 236-9172.
