How Can Business Structures Affect Personal Liability?
The structure of a business can significantly impact the extent of personal liability:
- Sole Proprietorship: Offers no separation between personal and business assets, making the owner entirely liable. - Partnership: Partners can be held personally liable for business debts and actions. - Limited Liability Company (LLC): Provides a shield that generally protects personal assets from business liabilities. - Corporation: Offers the most protection, with liability typically confined to the business entity.