LZ probably has a C-corp set up for ebay

LZ probably has a C-corp set up for ebay, so he has to file C-corp tax anyway. This set up seems to work fine with his situation.

LLC might have been easier, but LLC is new, so there might be court chellanges in the future.

In the last, if you are a CEO, or manager of a corporation, the plantif can always include you as an explicit part of the law suit. So, insurance is paramount.