How can I be a freelancer legally?

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Learning to juggle multiple clients and turn a side hustle into a business is something of an art. But if you’re among the lucky ones who are really making money off of your passion, you might need to consider how to set up a business entity as a freelancer worker. That’s because you’ve probably outgrown your status as a sole proprietor.

Figuring out how to set up a business entity as a freelancer to be either a limited liability company (LLC) or corporation is a great way to take your freelance business to the next level—and enjoy other advantages, too. As registered business entities, LLCs and corporations offer you more legal protection and certain tax benefits. Outside investors, small business lenders, suppliers, employees, and customers also tend to take a company more seriously when it’s a registered business entity.

How do you know if you’ve crossed the threshold and it’s time to set up a business entity for your freelance work? Here are six signs that other small business owners saw that helped them know it was the right time to set up a business entity. Then, follow our guide on how to set up a business entity as a freelancer in just a few steps.