Liability protection

Liability Protection means that an LLC shields its owners’ personal assets from most business debts and lawsuits. For example, if the LLC is sued, members’ homes, cars, and personal bank accounts are generally safe. This protection is the primary reason entrepreneurs choose an LLC over sole proprietorships. However, liability protection is not absolute—members can still be personally liable if they commit fraud or fail to keep business and personal finances separate. Maintaining a separate business bank account and proper records is essential to preserve protection.