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Incorporated entities enjoy the benefit of "limited liability"[0], ie: if your company does something "bad" you can't be liable beyond your share capital contributions. For example, if you make a self driving car and sell it, and it results in harm, and someone sues the company, you can't lose any of your personal assets; rather your only loss can be the capital which you put into the company.

tl;dr: if you do something commercial as a sole trader and not as a company, it's possible for you to be sued for your personal assets.

[0]: https://en.wikipedia.org/wiki/Limited_liability



I think for businesses like "running a website" this threat is overrated, to the point of absurdity, but again: willing to accept that I'm the weirdo.


I wonder if you'll say the same when Pinboard gets sued for copyright infringement by its archival feature. I hope it never happens, but saying "it's just a website" is a little cavalier.

(Yes, it merely takes an publicly available work that the users could download themselves, and makes it available to each individually. That's essentially what Aereo did, and look at them now.)


I'm not saying there's no legal exposure. My point is that no one is going to slip and fall on your website, and leave you on the hook for tens of millions of dollars in personal liability.

If I was building an Internet of Things blender I would incorporate in a heartbeat.


It's overrated until a customer decides to sue you. Also there are very few downsides to incorporating and limited liability is a massive upside.


Wait, does that mean that Pinboard is being run under your own name personally, as opposed to being part of an LLC or other corporate structure?

If so, I have to say, that would make me a lot more concerned as a customer.....


That's silly, since the only difference his sole proprietorship makes to you as a user is that if he loses your bookmarks you can sue him personally and force him to flee judgement and live amongst the penguins.


It also means that someone else can sue him personally and force him to flee judgement and live amongst the penguins.


Yes, but if he had an LLC, the only difference would be the penguin part; the company would still get shut down or sold.


Exactly. In scenaro 1 people lose all their data, in scenario 2 they lose all their data and I lose my car and cool Zippo lighter.

Moral: back up your bookmarks.


Well, there's also the case in which he declares bankruptcy personally and Pinboard's assets are comingled with his, and Pinboard has to shut down.


https://www.youtube.com/watch?v=HuGIgf-ICHM


> ie: if your company does something "bad"

In most jurisdictions, if you have control of a company (e.g. as the majority shareholder and director), and the company does something "bad" to the extent that it's illegal, the liability protection can be waived. Selling a self-driving car, in the knowledge that its behaviour is inadequate and would cause harm, may well result in loss of liability protection.

In short, insolvency is generally protected, but "bad things" often have less protection.


Yeah, but in practice, it almost never happens.


Be careful with that. In the US a single-owner corporation can (and regularly does) have courts "pierce the veil" of limited liability. Simply incorporating and calling yourself a company is not sufficient to limit your liability.




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