What is the difference between a limited liability company and a sole proprietorship?

A Limited Liability Company (LLC) and a Sole Proprietorship are both common forms of legally recognized business entities, but there are distinct differences between the two in Florida. An LLC is a legal business structure that combines aspects of a partnership with limited liability protection for the members. This means that, if the LLC incurs debts or liabilities, the members are only responsible for the money or property they contribute to the LLC. It also limits the personal liability for members, meaning that if legal action is taken against the LLC, the members are not personally liable. A Sole Proprietorship, on the other hand, is a business structure in which only one person owns all of the company’s assets and operations. This person is solely responsible for all of the business’s debts, liabilities, and assets. This means that the individual proprietor is personally liable for any losses or debts the business incurs. In Florida, LLCs are generally preferred over sole proprietorships due to the additional legal and financial protections LLCs provide. LLCs are also more likely to attract potential investors and are relatively easy to set up and maintain. With a sole proprietorship, the individual operating the business is fully responsible for its debts and liabilities, making this form of business more risky.

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What is the difference between a limited liability company and a sole proprietorship?

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