Like many other E-Biz owners, you may not feel inclined to structure your online business as a legal entity. Maybe you argue that your business is too small or that you only sell on eBay. Or perhaps you feel the process is too expensive. But the real question isn’t the size of your business, or how much it’s worth. The real question is, how much can you afford to lose?
Personal Asset Protection
When you’re operating as a sole proprietor, the law views you and your business as inextricably linked. Explains attorney Patrick O’Neill, CEO of http://IncorporateABusiness.com, “One of the biggest benefits of incorporating or forming an LLC is that your business becomes, in a legal sense, a completely separate entity from you and any other shareholders.” So in the unfortunate event that your business is sued, a judgment against your business doesn’t extend to your assets, other than those invested in the business. Similarly, your business’ creditors can only come after company assets – your house, life savings, and stamp collection remain safely out of reach.
Image Enhancement
Besides putting a virtual firewall around your personal property, you’re also strengthening your business’ image. This is especially important, because as a small E-Biz owner, you’re already at a disadvantage: