What is a business entity?

A business entity is a legal entity that is used to conduct business activities. This means that the business entity is a separate and distinct legal entity from its owners or shareholders. In New York, a business entity can include a corporation, limited liability company, partnership, sole proprietorship, or other business type. In terms of asset protection, a business entity allows the owners or shareholders to separate their personal assets from their business assets. This means that if an owner or shareholder gets sued, their personal assets are protected from the lawsuit because they are not connected to the entity itself. The business entity is legally liable for any debts or losses that the entity incurs, but the personal assets of the owners or shareholders are safe. Another advantage of a business entity is that it allows for the transfer of ownership without disrupting the business operations. When ownership is transferred, the entity remains intact and the new owners can take over without any big changes. This makes it easier to sell a business if the owners ever decide to do so. By setting up business entities, owners and shareholders can protect their personal assets and have more control over their business activities. It is an important part of asset protection law in New York and should be considered by anyone looking to start a business.

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