With micro-businesses that are incorporated, where you have one, two, or even three people involved, it can be fairly hard to maintain the legal wall that separates your personal assets from the business. I am part of a two person LLC. If I didn't have, say, the right kinds of liability insurance, a creditor could make the claim that the corporation really doesn't exist and go for my personal assets. If bank accounts are co-mingled, all bets are off. The list goes on of activities and facts that can, regardless of corporate legal filings, take you back to the state of sole proprietorship or partnership. On top of that, the cost of defending that status in the event of a suit can be nasty to boot.
