A legal entity is a business structure that is considered to be separate from the business owner for legal purposes. A legal entity is also called a business entity.
Examples of legal entities include LLCs and C-Corporations.
Sole Proprietorships and Partnerships aren’t on this list because they aren’t legal entities.
Meaning, they aren’t considered to be separate from the business owner for legal purposes. Instead, they’re an extension of the business owner for legal purposes.
This means that if your business is sued, Sole Proprietorships and Partnerships don’t protect your personal assets, or limit your liability.