Visit http://www.taxes-phd.com for more. Determining the best entity for your business is a complex but important decision that you will make. Corporations and LLC's offer liability protection. Without Liability Protection, anytime you interact with another person, there is a risk. From a liability standpoint, think of an LLC or Corporation as insurance for your personal assets. By operating as a Sole Proprietor or Partnership, you are personally liable for all business debts. You are also potentially liable for any lawsuits that may arise. Sole Proprietors and Partnerships also must pay self-employment tax on the net income of the business.
