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

A limited liability company (LLC) and a sole proprietorship are two of the most common types of business entities in Georgia. The main difference between the two is that an LLC provides more personal liability protection for its owners than a sole proprietorship does. In a sole proprietorship, the business is owned and operated by an individual, and that individual is the sole owner and liable for any debts or liabilities incurred by the business. This means that the individual is personally responsible for any debts and/or legal actions taken against the business. Any money that the business earns is considered the individual’s personal income and is subject to taxation. In contrast, an LLC provides limited liability protection to its owners, which means that they are not personally responsible for any debts or legal actions taken against the business. Owners of an LLC are not personally liable for any debts or liabilities incurred by the business and their personal assets are protected from any legal actions taken against the business. Additionally, any profits that the business earns are treated as the LLC’s income and are subject to taxation. Ultimately, an LLC is a business entity that provides more personal protection for its owners than a sole proprietorship. Although sole proprietorships are less complicated to set up, LLCs are often the preferred business entity in Georgia due to the increased legal and tax benefits.

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

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