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Every year, more professionals take the leap into entrepreneurship, and more often than not, they’re forming LLCs to do it. According to the IRS, LLCs made up 72.7% of all partnerships in 2022, far surpassing other entity types for the last two decades.
Why? LLCs combine the liability protection of a corporation with the simplicity and flexibility of a sole proprietorship. But those aren’t the only reasons they’ve become the go-to structure for startups, solo professionals, and even families looking to preserve generational wealth. Here’s why the LLC continues to gain momentum — and what that signals for the evolving business landscape.
Create a clear line between personal and professional
In the digital age, visibility is essential — but so is privacy. As online footprints grow, many entrepreneurs are looking to keep their personal information separate from their business identity.
An LLC can help. In states like Wyoming, Delaware and New Mexico, LLC owners don’t have to list personal details like their name or home address on public formation documents. By hiring a registered agent, you can form an LLC while keeping your own information off the public record.
That privacy can be more than a convenience — it can be a safeguard. Imagine a landlord with a problematic tenant who tries to bypass the property manager to contact the owner directly. If the property is owned through an LLC, there’s no personal trail. The tenant must deal with the management company or the registered agent, not you.
Protect and own your brand
Sole proprietors are legally required to operate under their first and last names unless they register a “Doing Business As” (DBA). But DBAs don’t always protect your name from being used by someone else, and the process varies wildly by state.
When you form an LLC, you lock in a unique business name with your state. No other company in that jurisdiction can operate under a name that’s identical or deceptively similar. This creates a stronger, more defensible brand, especially important when launching a business that relies on digital visibility or e-commerce.
Think of it this way: if you’re putting effort into building your online presence, why risk confusion or brand overlap with another business that shares your name?
Use an LLC for estate planning and asset protection
LLCs aren’t just for business. Increasingly, they’re being used for estate planning — especially in states like Wyoming and Nevada that offer special types of “closely held” LLCs.
For example, a family vacation home could be placed into a Wyoming Close LLC, with parents gradually gifting membership shares to their children over time. As long as the gifting stays within IRS limits, this strategy can help avoid immediate tax consequences while protecting the asset. It’s a smart, efficient way to manage, especially when combined with professional tax guidance.
Why the rise in LLCs matters
The increasing popularity of LLCs isn’t just good for business owners — it’s good for the economy.
- LLCs create jobs. New businesses mean new roles and opportunities.
- They drive local growth. Formed locally, LLCs contribute to municipal tax bases and community development.
- They empower innovation. Flexible structure and low barriers to entry mean more entrepreneurs can experiment, iterate, and compete, leading to better options for consumers.
In short, more LLCs mean more economic mobility, more competition and a healthier entrepreneurial ecosystem.
Related: 70 Small Business Ideas to Start in 2025
The bottom line
The LLC isn’t just a legal structure — it’s a modern tool for a modern economy. It allows entrepreneurs to safeguard their assets, own their brand and grow with flexibility, whether they’re launching a service business, building a real estate portfolio or passing down a family home.
As the line between work and life continues to blur, and more people look to take ownership of their careers, LLCs offer an accessible, effective way to take that first step, with confidence.