Have you ever dreamed of turning your side hustle into a real business? Whether you’re selling secondhand clothing on the web, editing videos for clients, reselling sneakers, or running a monetized YouTube channel, one of the most important decisions you’ll eventually be forced to make is how to legally structure your company. For most young business owners, especially teenagers and university students, the most flexible and protective choice is called an LLC—or Limited Liability Company.

An LLC is a business organization that keeps your assets legally safe from your business. That just means, essentially, if your business ever gets sued or gets into debt, your personal belongings—your savings account, car, laptop, say—is typically out of the reach of creditors. It gives a form of legal shelter that sole proprietorships, the default kind of business organization for most teen businesses, simply cannot offer.

But LLCs aren’t just about protection. They also handle taxes. Unlike corporations, LLCs are not taxed twice. Instead, the profits “pass through” to the owners (members), and you only pay personal income tax on your earnings. This makes it easier to file and usually cheaper than running a full corporation. Also, having “LLC” at the end of your business name can make your company more credible to customers, suppliers, and banks. People take your business more seriously when it’s legally registered.

Of all the options, LLCs strike a balance between ease and safety. Sole proprietorships are fastest to establish but enjoy no liability protection. Corporations offer most protection and are ideal for seeking investors, but they’re more expensive to establish and maintain. LLCs exist in between: easy to establish for beginners, but with some organization to support long-term expansion.

Setting up an LLC is easier than many teens expect. First, you’ll need to choose a unique name for your business, which must usually include “LLC” or “Limited Liability Company” in the title. You’ll then file a simple document called the Articles of Organization with your state—this can often be done online in under 30 minutes. Next, you apply for an EIN (Employer Identification Number) from the IRS, basically a Social Security number for your company. If you have business partners, you’ll also need to create an Operating Agreement, which defines the rules by which your company is run. Finally, open up a business bank account so that your business and personal funds remain separate.

You might be wondering: can a teen even open an LLC? The short answer is yes—with help. For the most part, minors can’t legally incorporate as an LLC on their own, but with the addition of a co-signing parent or guardian as a manager, they can. Even if you are under the age of 18, you should typically be able to fill out the forms and start running your business as an LLC with the right adult relationship in effect.

So, why would a teen ever require an LLC? Well, that really just depends on how seriously you’re taking your hustle. If you’re earning money consistently from freelance gigs, product sales, or online content, then you’re already running a business—even if you haven’t officially established one yet. An LLC gives you protection, structure, and legitimacy. You can also claim some business expenses on your taxes, like software subscriptions, equipment, or advertising costs, that end up saving you money in the long term.

There are a lot of misconceptions regarding LLCs that get in the way of young adults taking that next step. Some think they are only for adults. Others think they are too expensive or complex. But in most states, less than $200 is charged to form an LLC and you don’t even need to use an attorney. You don’t have to be wealthy, be a celebrity, or even have a full-time job to benefit from one. The sooner you start thinking like a business owner, the better prepared you’ll be for success in the future.

Creating an LLC will not turn you into a millionaire overnight—but it will put you on track to treating your ideas like a real business. If you are generating money, acquiring clients, or plan on turning your side hustle into a larger thing, you might want to give your business the legal support it deserves. As a teen, you can be smart—and create smart.