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First, the bottom line: Many people start their eBay business as a sole proprietorship or, if there is more than one owner, as a partnership. If you are concerned, however, that your eBay business will create lawsuits, debts, or other liabilities that could affect your personal assets, you should consider forming a limited liability company (LLC) or corporation. You should also consider doing so if your accountant or tax preparer believes there are tax benefits from it.

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