At this point, you’ve decided to start a cleaning service, but you don’t know what your business structure should be: sole proprietorship, partnership, LLC, or corporation. The information is confusing, there is paperwork to file, and it costs a lot of money to get advice. Well, not really, I’m here for you.

Most cleaning services start out as a sole proprietorship. For some this works, but I strongly advise you not to do this. Before explaining why, you need to know the differences between the different structures.

Sole proprietorship is the simplest form of business that directly links the owner to it without providing any protection to its assets as it is a different entity. Basically, the owner is solely responsible for all debts, benefits from all income, and the business is his or hers for any legal purpose.

A corporation is an entity on its own and the owner becomes a shareholder of the corporation. In essence, this means that the corporation itself is liable without the owner being subject to any liability through his or her personal assets. The actions and debts of the business are all on the business and therefore do not affect the private assets of the owners. Special tax rules apply and both entities, including the owner and corporations, must pay taxes separately.

A Limited Liability Company (LLC) is a mix between the two. This legal structure is maintained by the states and not the federal government, so all revenue flows to the owners; however, any liability is limited only to the business and personal assets of the owners and the owners as an entity are protected.

For a cleaning service, I strongly recommend the LLC structure. You’ll work in expensive homes, offices with sensitive information, and companies with proprietary technologies and processes. If something happens because of your mistake or the mistake of your employees, you’ll want to make sure your personal assets are protected and off limits in the event of a lawsuit.

Forming an LLC can seem like a daunting task, but services like LegalZoom and others offer to complete the entire process for as little as $150. I highly recommend using such a service as they do a great job at an affordable price and make sure everything is ok. Please note that before you can form an LLC, you must obtain a FEIN number from the IRS. Many websites will try to charge you more than $50 for this, but you can easily get this number online from the IRS online system in less than five minutes. As an alternative, many states offer a free online training service or free forms for you to complete yourself.

Once this step is complete, you will have the necessary documentation to complete many other tasks, such as opening a business checking account.