What is a business entity?

A business entity is a type of legal structure that provides liability protection to owners. This means that in the event of a lawsuit, rather than the individual being personally liable for the business’s economic losses, the business entity itself becomes liable for its losses. This type of protection is a key component of asset protection law in Kentucky. A business entity can be either a corporation, a limited liability company (LLC), or a partnership. A corporation is a separate legal entity owned by shareholders, and can be publicly traded or privately held. It is subject to taxation on profits, and often provides limited liability protection for its owners. An LLC is a business entity defined by its members, and can be either publicly traded or privately held. LLCs provide their members with limited liability protection from lawsuits and creditors. Finally, a partnership is a business entity formed by two or more people or companies. Partnerships provide limited liability protection for their partners, while profits are shared among the partners according to the agreement made between them. In any case, a business entity can be used to protect an individual’s assets in the event a lawsuit is filed against the business. Therefore, it is important to be familiar with asset protection law in Kentucky when deciding what type of business entity to form for your business.

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