Setting up a corporation or LLC offers significant benefits to business owners and real estate investors. First, the unlimited personal liability you have when activities and assets are in your personal name is greatly minimized. A claim against the company is against the company – leaving your other personal and business assets protected. Second, the risk of an IRS audit is greatly reduced when you operate through a properly formed corporation or LLC. Furthermore, there is a certain prestige to business acknowledgement when operating through a corporation or LLC. Savvy types know the risks of doing business in your individual name. Using a corporation or LLC is a statement of business sophistication.