3 ms·

Corporations (and LLCs) protect you legally from the mistakes caused by others.

• civilitty 3y ago
  Not if it’s a single owner LLC or corp. IANAL but you have to be anal about separating personal and business activities if there’s only one shareholder.
  • mindslight 3y ago
    Single owner isn't really the problem per se. Rather it's the owner(s) being significantly involved in the operations of the company, such that they can still be held to be personally responsible for the actions in question or the LLC can be declared undercapitalized (since it's not just paying someone to do those jobs). So like much of the legal system such structures don't actually provide much protection for individuals, but rather well-moneyed conspiracies.
  • Digory 3y ago
    It protects you from the mistakes of others. The problem for the single owner is that they do a lot themselves, and for that, you need insurance. But when it works, it works. Imagine you dropship a faulty part to someone, so that there's no negligence by the sole owner. You'd much rather have the lawsuit go: Plaintiff vs. Your LLC & Vendor Co. than Plaintiff vs. You & Vendor Co.