In many cases I prefer to form llc which combines limited liability protection with a pass-through tax structure. Recently I used same procedure in
how to form an llc in connecticut IRS rules allow LLCs to choose between being taxed as partnership or corporation. Limited liability is a type of protection for your personal assets. It ensures that your personal liability for the business' debts and obligations is no more than the amount of money you invested in the business. This protects your home, automobiles, and other personal assets from being used to pay off any debts accrued by your business.