Chapter 3: Entity Types
An LLC is the simplest and most common business entity type in the United States. LLC stands for “Limited Liability Company”, with the idea being that the entity is separate from you as a person and has its own liabilities. This means that should your company get sued or in some type of trouble, you are not personally liable for damages committed by the company (provided that you personally have not broken any laws in the process). You may have heard the phrase “corporations have the same rights as people” - this is generally referring to the limited liability structure of most companies, and their ability to own and operate assets in the same way people do. LLC’s can own property, vehicles, or anything a person can own. Forming an LLC also makes it incredibly easy to work with any number of business partners, create business bank accounts and credit cards, and gain access to business-only services like seller’s permits and wholesale pricing for goods sold. Generally speaking, business credit cards don’t report to your personal credit profile, and often come with higher limits than you might be able to access personally.