IANAL, but I have done this a few times. I'm pretty sure you do not need a company to make money as a self-employed person in the USA. Not in terms of federal taxes anyway.

What you might need a company for is to pay sales taxes you charge for physical goods, or get insurance appropriate for your line of work. That's likely to be state-by-state. You just get the convenience of an EIN by registering and some additional legal protections by being a distinct entity (i.e. I could sell the company or assign IP to it or hire employees).

I have certainly gotten contractor income to me personally that I just had to account for. In the USA for small businesses you'd have to send the same documentation, so it doesn't even save paperwork. As a sole proprietorship I get the same tax documents from my clients as I would if I were operating directly under my name.

Edit: Also, if this were true in the USA, it implies that all those Uber drivers each have a sole-proprietorship set up. I'm pretty sure that companies can hire contractors as individuals without them becoming businesses.

You also need a company so you don't lose your house and life's savings if you're sued, too. That's what freelancers primarily create companies for. IRS doesn't really let you take advantage of any tax loopholes unless you employ a bunch of other people.

I don't understand characterizing compliance with tax law as using "loopholes." What are you referring to?

The topic is obviously enormous and more complicated than "big business bad", but it wouldn't be a loophole if it wasn't legal. Defining only illegal things as loopholes is not a great line in the sand, it's kind of a tautology that loopholes aren't illegal. I would expect that the specific definition varies a lot by person because democracy. One person's corrupt loophole is another person's tax incentive, but either way the loophole is legal.

What specifically the parent was referring to I'm not sure, but that would be why it is consistent to describe a company as both "in compliance with tax law" and also as "using loopholes". If they weren't in compliance with tax law they'd just be breaking the law. No one is accusing the companies of breaking the law, they're accusing the tax system of being biased and corrupt.

Do you play board games?

Which games don't have edge cases, loopholes, exploits?

Of the games which can be "gamed", are they more or less complex than any given tax code?

Thank you for explaining this. As an American, I was unaware.

In the US, you're already a sole proprietorship without any registration. Of course, if you're actually doing business, you probably want the protections of an LLC, which requires registration and fees. But you can accept uncompensated gifts as an individual, and you can accept business income as a sole proprietor, all without registering for anything in particular. You are, as always, required to file accurate taxes, including estimated withholding.

Number of employees or members isn’t relevant. Types of behavior performed is. It is worth talking to a lawyer about this if you have enough revenue this matters.

You can take donations but AFAIK business licenses are required in every state in the US whether you provide product, service or something online. If you take donations then by law you have to declare that as income.

There is no generally “business license” in Arkansas. Some municipalities require them (but have very limited means of enforcing that requirement), and some specific occupations require licensure, but unless you fall under one of those narrow categories you only have to file taxes.

I've always found it deliciously ironic that the Articles of Confederation and the Constitution both dealt with interstate commerce and set up the federal government as superseding the states in this regard... but then corporations are a state level entity not federal, complete with 50 states worth of regulations.