Tyler Willingham explains how business entities like LLCs and corporations create legal separation between you and your business, protecting personal assets if things fail. Most businesses form in their home state, but many choose Delaware for its favorable corporate laws.
And the confusion comes because we have two areas of law, or two, uh, I should say, uh, government agencies making these laws. So they're two different things, but people think they're the same thing because we talk about them together. And that is, you have the states, which have entities that you can form, and these entities allow you to protect yourself. From liability. So really, when you're creating a company, you're creating a new person. That new person, you're doing that with the idea that if that business goes under, the business goes under. I don't go under. Usually when people are structuring their businesses, that's what they think about. That's what you're doing with the state, you know, whatever state that you're in. Or it might be in certain preferred locations like Delaware is a very common one. But those are things like I'm forming a corporation, I'm forming an LLC, limited partnership, general partnership. Those terms are generally used, but there's that context of structuring your business.
