Ask any gearhead to imagine a Rolls-Royce and they’ll immediately think of the luxurious British limousines that are designed for the world’s wealthiest car buyers. They probably won’t think of jet engines, backup generators, or submarine propulsion systems. Confusingly, Rolls-Royce Holdings plc doesn’t actually make cars at all, but it does make all three of the latter things.
In recent years, Rolls-Royce has invested significantly in its manufacturing operations in America, and in June 2025, it announced that it was investing $24 million to expand its logistics and assembly facility in Mankato, Minnesota. In early July 2026, that expanded facility was officially opened, bringing more than 100 new jobs to the area in the process — none of which will be for making cars.
The expansion will help the company boost its production of backup generators for large-scale infrastructure, which can be used to support everything from airports to power-hungry data centers. In its press release, the company cited support for data centers as the primary reason for the investment, adding that their demand for power generation products grew roughly 50% in 2024 alone.
With the expansion now complete, Rolls-Royce says it expects production levels of its mtu Series 4000 generator sets to increase twofold. The latest investment also includes room for production to increase further at a later date if there’s enough demand.
Why doesn’t Rolls-Royce Holdings make cars?
Omer Messinger/Getty Images
Decades ago, Rolls-Royce made both jet engines and luxury cars, but today, the two companies are distinct. Rolls-Royce the carmaker is owned by BMW and based in Goodwood, England, while Rolls-Royce Holdings makes generators, jet engines, and suchlike. The split between the carmaking and industrial engines divisions happened in the early ’70s, when the original Rolls-Royce company went bankrupt after running out of development cash for its RB211 turbofan engine. The British government rescued the company but split it into two halves, eventually selling its carmaking division to Vickers in 1980.
Rolls-Royce’s jet engine division was sold back to private investors in 1987, and it has now grown to be one of the U.K.’s largest companies. It’s this manufacturer that has invested in the new Mankato plant, as well as in other U.S. facilities such as its engine assembly plant in Aiken, South Carolina.
Meanwhile, Rolls-Royce Motor Cars was divided again in the late ’90s. After a bidding war between BMW and Volkswagen, the latter ended up purchasing the original factory in Crewe, England, as well as the Bentley brand, while BMW secured the rights to the Rolls-Royce branding. BMW subsequently relaunched the Rolls-Royce brand in 2003 with the Phantom VII.
There’s a special kind of panic that hits at 11 p.m. on a Tuesday when you Google “can someone sue me personally for my freelance business” and the answer is, technically, yes. I know this because I lived it. For fourteen months, I ran a growing consulting side hustle- invoices, contracts, the whole act- under exactly zero legal structure. I didn’t choose to be a sole proprietor. I just never chose to be anything else, which, it turns out, is the same thing.
The wake-up call came from a client’s offhand comment about “your LLC,” followed by my very convincing silence. That night I fell into a research hole so deep I emerged the next morning having read seventeen tabs on liability shields, self-employment tax, and something called “piercing the corporate veil” that sounded like a phrase from a divorce lawyer’s memoir. So: is a sole proprietorship secretly a ticking time bomb? Is an LLC the adult, responsible choice, or just expensive paperwork with better branding? Let’s actually work through it.
What Is a Sole Proprietorship, Really?
Here’s the part nobody tells you clearly: if you’re earning money from your own business activity and haven’t filed anything with your state, you’re already a sole proprietor. There’s no form to submit, no fee to pay, no ceremony. You and the business are, legally, the same person. That’s the whole structure.
The upside is real. It’s the fastest, cheapest way to start working for yourself — no filing fee, no separate tax return, no annual report to remember. You just start invoicing. The downside is baked into that same simplicity: there’s no legal wall between your business and your personal life. If the business owes money or gets sued, the business is you, so your savings account, your car, and potentially your house are all fair game.
What Does an LLC Actually Protect You From?
A Limited Liability Company creates a separate legal entity- one that can own things, owe things, and get sued, largely independent of you personally. That separation is the entire point of forming one.
It’s worth being honest about the limits, too. An LLC won’t protect you if you personally guarantee a business loan, if you commingle business and personal funds, or if you’re personally negligent — say, you’re a contractor and you cause an injury through your own carelessness. Courts can “pierce the corporate veil” and go after your personal assets anyway if you treat the LLC as a legal fiction rather than a real, separately run entity. The protection is genuine, but it’s not a force field; it’s a structure you have to maintain.
Which One Actually Costs More to Start?
This is where a lot of the fear around LLCs turns out to be overblown, and a lot of the assumed simplicity of sole proprietorships turns out to be incomplete.
Sole Proprietorship
LLC
Setup paperwork
None required (unless operating under a different name)
Articles of Organization filed with your state
State filing fee
$0
$35–$500 depending on state (national average is roughly $130)
Ongoing state fees
Typically none
Many states require an annual report; fees range from $0 to $800+ (California’s franchise tax is the notable outlier)
Separate business bank account
Optional
Strongly recommended to preserve liability protection
EIN required
Only if hiring employees
Recommended even for single-member LLCs, to avoid using your SSN
A sole proprietorship is still the cheaper entry point in dollar terms. But “cheaper to start” and “cheaper overall” aren’t the same question — it depends what a lawsuit, a bad debt, or a messy tax season would actually cost you.
How Do Taxes Actually Differ?
This is the part I got wrong for months, assuming an LLC meant a whole new tax regime. It doesn’t, automatically. By default, both a sole proprietorship and a single-member LLC are taxed identically: profits and losses pass through to your personal tax return, and you pay self-employment tax (15.3%, covering Social Security and Medicare) on your net earnings.
The actual tax advantage of an LLC isn’t automatic — it’s optional. A single-member LLC can elect to be taxed as an S-corporation once profits reach a meaningful level, which can reduce self-employment tax by letting you pay yourself a “reasonable salary” and take remaining profit as a distribution not subject to that 15.3%.
That election involves added complexity — payroll processing, additional filings — so it’s rarely worth it for a business bringing in a few thousand dollars a year. It becomes worth asking about once net profit is consistently well into five figures.
Does an LLC Actually Make You Look More Credible?
Here’s a question I didn’t expect to matter as much as it did: does “LLC” after your business name change how people treat you? Anecdotally, yes. Some clients, vendors, and lenders treat an LLC as a signal of seriousness — rightly or not — the way a business bank account or a proper invoice template does. It’s not a guarantee of better contracts, but it removes a small, avoidable hesitation from a prospective client’s mind.
It also matters for banking and financing. Business lenders and some payment processors are more comfortable extending credit to a registered entity with its own EIN and bank account than to an individual operating under their own name.
Do You Still Have to Report “Beneficial Ownership” in 2026?
If you researched this a year or two ago, you may still be carrying around outdated fear about the Corporate Transparency Act’s beneficial ownership information (BOI) reporting rule — the one that threatened steep penalties for LLC owners who didn’t file. Here’s the current state of play: in March 2025, FinCEN issued an interim final rule that removed the BOI reporting requirement for domestic U.S. companies and U.S. persons entirely. As of today, that requirement applies only to foreign entities registered to do business in the U.S. — not to a typical American-owned single-member LLC.
That said, the underlying law hasn’t been repealed, courts have upheld its constitutionality, and FinCEN’s final rule is still pending in 2026, meaning the rule could tighten again with limited notice. A small number of states have also introduced their own versions; New York’s LLC Transparency Act took effect January 1, 2026, but after a late amendment, it applies only to foreign LLCs doing business in New York, not typical in-state LLCs. The short version for most small business owners forming a domestic LLC in their home state: this isn’t currently a filing you need to worry about, but it’s worth a five-minute check-in with a professional if your situation involves foreign ownership or multiple states.
So, Which One Should You Actually Choose?
There isn’t a universally correct answer, but there is a useful set of questions. How much personal risk does your work actually carry — a freelance copywriter has a different exposure profile than someone renovating properties or handling clients’ money. How much profit are you actually generating, since that determines whether the tax flexibility of an LLC is relevant yet. And how much administrative overhead are you willing to take on, since an LLC does require you to actually treat it like a separate entity — separate bank account, its own paperwork, its own discipline.
If you’re testing an idea with minimal financial exposure and low risk of being sued, operating as a sole proprietor while you validate the business is a completely reasonable starting point- you can always convert to an LLC later, and most people do exactly that. If you’re already generating consistent revenue, working with clients under contracts, or doing anything with meaningful liability exposure, the cost of forming an LLC is generally small next to what it protects.
I eventually filed mine on a Wednesday afternoon, paid my state’s filing fee, and felt almost anticlimactic about how undramatic the process actually was compared to the spiral that preceded it. If you’re standing where I was, at least you can skip the 11 p.m. panic-Googling, you already know what the seventeen tabs would have told you.
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