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by SanFranManDan 3474 days ago
A sole proprietorship doesn't give you the same protections as a corporation. You have unlimited personal liability for your business actions.
2 comments

Exactly.

And in Slovenia (potentially elsewhere in Europe) I have to do a bunch of bureaucracy to get a sole proprietorship. In the US, I don't.

Hence why it's one of my fav things about moving to the US.

The UK is the same as the US in this respect. Something I'd taken for granted until now.
While this is true and it is valuable to at least register an LLC, it's a common myth that an LLC will shield its owners from all civil liability. LLCs don't provide protection from tort claims and the owners/directors (people who can't invoke respondeat superior) can be individually pursued for tort liability without having to pierce the corporate veil (which itself is more common/possible than many people believe).

I understand you may already know this, but I think it's an important caveat that is frequently overlooked in such discussions, causing many small businesspeople surprise when they learn that they may be personally liable in the event of a lawsuit (which will probably name the publicly-listed owners as defendants by default).

IANAL