The LLC protects your personal assets from from financial issues with your business, whereas a sole proprietorship doesn’t.
That's actually a huge overstatement and quite often untrue. Regardless of your state of residence, an LLC doesn't
necessarily protect your personal assets, for a couple of reasons.
First, to claim the protections, you must scrupulously avoid any commingling of personal and business assets. Do you claim a business deduction for a vehicle that is used for both personal travel and business travel, without keeping detailed mileage records? Do you ever use any business assets to benefit yourself personally in any way, e.g., take bars of soap (or pencils, or notepads) for personal use without paying for them? Do you use your soaping room for any other activity outside the LLC's business purpose, such as personal crafting, or day job work?
Any small thing like that could be deemed "commingling," which would allow anyone who sues your LLC to "pierce the veil" and get a money judgment against your personal assets.
Second, even if you've never commingled a single thing, people can still
name you personally in a lawsuit, along with your LLC. While you may eventually get the personal claim dismissed, you still have to pay all of the legal costs to obtain that dismissal.
I'm not knocking LLCs for the right situations. But if you are a home crafter, especially one who lives in a pro-lawsuit state, or one with high LLC costs (ex: California on both accounts), an LLC 100% isn't worth the cost. Any "peace of mind" is pretty much illusional. One could spend far less to get the very best insurance policy, and not have the hassle of the extra accounting rules, extra tax returns, etc.
Certain states will assume that a DBA registered without an LLC means that you are a sole proprietorship.
That's a given, actually, and not pertinent at all to the issue of asset protection. DBAs were never intended to, and never do create a separate legal entity or asset protection of any kind.
The purpose of filing a DBA is to legally use a particular business name instead of the legal name of the individual or the legal entity that files for the DBA.
So if the DBA is filed by an individual who operates as a sole proprietor, that individual remains a sole proprietor. If the DBA is filed by an LLC or general corporation, those entities remain unchanged, as well.
Also, the location where I’m opening a retail location requires an LLC for the lease.
That's may be the case, but the great majority of landlords also require a personal guarantee from the individual behind the LLC, unless the LLC is very well-established and well-funded. If you've given that personal guarantee, the LLC is no protection against a lawsuit brought by the landlord for unpaid rent, damages to the building, etc,
Take some time to compare and contrast to see what the best option is for you.
This is actually
great advice - assuming you consult with a knowledgeable professional who doesn't just take your money to create an LLC, rather than advising you on the realities of cost v. benefit.
