Which business form gives you the least liability exposure
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Which business form gives you the lease liability exposure and why?
This question is in reference to the three types of business structures: sole proprietorship, partnership, and corporation.
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Hi there,
First, here is some basic info about the three types of business structures:
Sole Proprietorship:
A Sole proprietorship is a business which legally has no separate existence from its owner. Hence, the limitations of liability enjoyed by a corporation do not apply. All debts of the business are debts of the owner. It is a "sole" proprietor in the sense that the owner has no partners. In some jurisdictions a business owned by a husband and wife jointly can still be considered a sole proprietorship, in others it would be considered a type of partnership.
A sole proprietorship essentially means a person does business in their own name and there is only one owner. Since the business is really just an extension of that person and not a new entity (like a corporation) any business debts are also personal debts. If the business were to get a judgement filed against it, it would be a problem for the owner. As a sole ...
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