What is the difference between a sole proprietorship and an LLC?

The difference between a sole proprietorship and an LLC in Arizona is that a sole proprietorship is a type of business that is owned and operated by one individual, while an LLC is a limited liability company. A sole proprietorship in Arizona is the simplest and most common form of business structure. They are easy and inexpensive to start as there are fewer formalities and filing requirements than other business structures. However, the downside to setting up a sole proprietorship is that the business and the owner are one and the same, so the owner is personally liable for all debts and liabilities incurred by the business. An LLC in Arizona on the other hand, is a legal entity that provides its owners (called “members”) with limited liability protection from debts and liabilities incurred by the business. This means that if the business fails, creditors cannot go after the personal assets of its members. In other words, the members’ personal assets remain protected from judgments against the LLC. An LLC also provides flexibility to its members as they can be structured in different ways, such as partnerships or corporations. In summary, the primary difference between a sole proprietorship and an LLC in Arizona is that a sole proprietorship provides no liability protection to the owner, while an LLC provides limited liability protection to its members.

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What is the difference between a sole proprietorship and an LLC?

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