After conducting some research, the Gaytors realized that operating their business as a sole proprietorship poses the risk of personal liability because there is no legal separation between personal and business assets. If they default on business obligations like loans, their creditors may have a right to claim personal assets for payment. In addition, they can also be held personally liable for the negligent acts of themselves or their employees. As their trusted tax advisor, the Gaytors are seeking your advice as to what type of business entities are available (other than Sole Proprietorship).