One danger of starting a proprietorship is that you may be exposed to personal liability if the business goes bankrupt.This problem would be avoided if you formed a corporation to operate the business.

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In a proprietorship, there is no legal distinction between the owner and the business, so the owner is personally liable for the debts and obligations of the business. However, in a corporation, the business is a separate legal entity, so the shareholders are not personally liable for the corporation's debts and obligations.

One Danger of Starting a Proprietorship Is That You May