Better ProtectionEntities are typically protected against personal liability for business debts and other liabilities. This means creditors can’t collect your personal assets or the personal assets of your managers to pay business debts and judgments.
Potential Tax BenefitsThere are often significant tax savings that can be realized by setting up a separate entity. To begin with, it's simply easier to separate your deductible business expenses from your non-deductible personal expenses.
Deal CertaintyWith a separate entity and a good Operating Agreement (LLC) or Bylaws (Corporation), the owners and managers of your business all know what their deal is! No more wondering who's in charge, who owns what percentage of the business, etc.
LegitimacyPeople tend to see a separate entity such as an LLC or corporation as a more legitimate business than a sole proprietorship. It shows that you take your business seriously and have taken the right steps to protect yourself and your company.
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