# Starting a Small Business Level 2: Legal setup (free quiz and certificate) | Get Certified for Free

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Starting a Small Business · Level 2 of 5 · Foundations

# Legal setup

Business structures, registration, licenses, and taxes.

## Study notes

1. A sole proprietorship is the simplest structure, but the owner is personally liable for business debts.
1. An LLC can separate business liabilities from personal assets when formed and run properly. Corporations add more formality.
1. Register the business name with your state or county as required, and get the licenses and permits your city, county, and state require.
1. An EIN from the IRS is free. It is needed for hiring employees and for most LLCs and corporations.
1. Keep business and personal money in separate accounts. Mixing them makes taxes harder and can weaken liability protection.

## Quiz: 6 questions

Choose one answer for each question, then check your answers. Score 5 of 6 to pass. Then enter your name and email to download a PDF certificate and have a copy emailed to you. Answers are graded in your browser.

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