Entity Framework POCO with WCF software design question?

Having separate classes for your POCOs and your Contracts will allow you to create Message Oriented services rather than RPC Style services.

Having different data classes at persistence layer and contract level gives you the most flexibility. For example, you may not want to expose all your persistent fields over a contract or you may want to expose different hierarchy of data over a contract etc. It also allows to change both independently of each other.

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