Ah, the age-old question of to LLC or not. I perform several pro-bono lectures each year on this and other subjects for Visual Art Exchange, a local Raleigh not-for-profit organization that helps emerging artists. This is easily the most often asked question at every lecture - the second one being on sales taxes.
It's very important to keep in mind that a single-member LLC is the same thing as a sole proprietor for income tax purposes. A single-member LLC is referred to a disregarded entity in the tax code. It doesn't exist for income tax purposes.
A single-member limited liability company can only offer legal advantages to individual owners, but not everyone benefits from those advantages. For instance, a single-member LLC (in most states) will offer some form of asset protection from liability for the sole member. However, if the liability is determined, in a court of law, to be from gross negligence or misconduct from the sole member of the LLC, the courts will often "pierce the LLC veil," essentially undoing the purpose of the LLC. Also, if the sole member doesn't have any significant assets outside of their business (primary residence, automobiles, cash, etc), it also may not be worth forming an LLC. In some states (Florida included, I think), debtors won't have access to jointly-held assets (joint tenants by the entirety) unless the liability is jointly held. For instance, if your home is held in you and your wife's names, it cannot be touched unless your wife is also on the debt. Often for liability, a good umbrella and/or business liability insurance policy is a better alternative.
The LLC may also offer an intangible value in public perception. In many cases, the public perception of a business that is registered as an LLC is that the business is established and reputable. It may have employees, it's registered with the state and it has a life outside of just the owner.
If the LLC is already established (as it is in this case), I would leave it in place. The annual cost to renew the LLC in Florida is only $138.75 and it is a tax-deductible expense for both income and self-employment tax, so the after-tax cost to the sole member is less than $100. A $1 million umbrella policy with a licensed insurance agency is probably somewhere close to $200 per year, or twice the cost. You won't have to change bank accounts, order new checks, alert all your vendors of your new EIN/SSN for 1099 reporting purposes, and other administrative technicalities that are involved when dissolving or establishing a business.
Feel free to PM me if you have any more questions. I do this quite a bit on other forums as well and have clients in about 20 different states. My office is usually in Raleigh, NC, but I am on assignment in Toronto for 3 years. Most of my work is done remotely anyways, but I travel to NC often.
