Unlimited Risk

You'll have this if you set up your business as a sole proprietorship. Lose a lawsuit running that fruit stand, and not only do you lose your business, but you lose your home, your car, your clothing, that hand-drawn-picture of The Animaniacs, etc.

How do you protect against unlimited risk? Incorporate as an LLC, or Limited Liability Corporation. That way, if you lose the Stooge Lawsuit, you'll still lose the company...but you'll keep your personal assets. And that's a good thing. You don't want to end up living in your Prius down by the river.