It comes down to liability in the event of an unsuccessful lawsuit:

Sole proprietorship - your personal assets may also be taken

Incorporation - only business assets are generally liable if insured accordingly

Corporations were formed so that trading merchants and ship captains didn't have to pay out when their lucrative expeditions killed off sailors and handlers.

https://www.ribbonfarm.com/2011/06/08/a-brief-history-of-the...