Working as a sole propietor

[SumoClimber]

AFIK, S corp is mainly to cover you for tax purposes so you don't get double taxed on your income as a sole proprietor. It doesn't have the same liability protections an LLC or a full incorporation would. Lemme see if I can find a good explanation link to post so I don't have to write a book.

 

[Matt J Leppek]

Thanks Sumo.

From what I know, s corp does not protect you from getting sued, however it allows you to have insurance, and insurance can prevent you from getting sued, however there are loopholes that the insurance company can find so it does not have to pay, then it falls back on you as the individual. In an LLC if the insurance company backs out or cannot cover the full amount, the lawsuit can only fall onto the business, not affecting the person as an individual.

 

[SumoClimber]

Found some of the info I was looking for, taken from the IRS page on S corps. "This limits the financial liability for which you (the owner, or "shareholder") are responsible. Nevertheless, liability protection is limited - S corps do not necessarily shield you from all litigation such as an employee’s tort actions as a result of a workplace incident."