The biggest advantage of a legal entity over a sole proprietorship or a general partnership is the corporate veil.
This is what protects corporate shareholders and LLC members from personal liability for business debts. In order for a creditor to get as far as an owner’s personal assets, the entity veil has to be pierced, which means the creditor has to prove the corporation or LLC didn’t act like a separate legal entity by filing the correct IRS paperwork, adhering to the tax laws and following other legal formalities, which I discuss often in these blogs.
You want to maintain this veil of protection and thus you will follow the rules. So for all you extreme and unchained rebels out there: Please channel your boundless energy into your business and not against the rules which, if followed, will actually help you.