Common Type Of Business Operating

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The sole proprietorship is both the simplest and most common type of business operating in the United States today. Most businesses that are owned and operated by a single person take this form. Small business owners who have sole ownership of their business are automatically considered under this business type if they do not take steps to establish themselves as another type of business. The important feature of a sole proprietorship is that the law makes no division between the person, the sole proprietor, and the business. That is why one is held personally liable for any and all circumstances. However, In a LLC (Limited Liability Corporation) the owners not personally liable for the LLC’s debts (There are some exceptions to this…show more content…
If one forms a corporation that lacks the money or insurance to pay for a legal claim brought against it, they can be positive that the lawyer for the person suing you will seek a way to sue you personally, and to collect on your personal assets. Some examples of how you could be sued personally even though you’ve formed a corporation are as follows. “A visitor slips and falls at your place of business and breaks a hip. The visitor’s lawyer sues you personally for negligence, claiming you failed to keep your premises safe. An employee accidentally injures someone while running an errand for you. The injured person sues you personally for damages claiming you negligently hired, trained, or supervised the employee. A product you invented, designed, manufactured, or distributed injures several users. The injured people sue you personally for negligence. Someone sues you, claiming you’ve infringed upon a patent or copyright.” Even if you have formed a Limited Liability Corporation you can still be liable for the above reasons. Another way you can be personally responsible even though you’ve formed a limited liability corporation is through a legal doctrine called “piercing the corporate veil.” Under this legal rule, “corporate owners risk being reached personally through their corporation’s structure if they treat
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