Yea that is just not true.

If you have an LLC set up properly is insulated your personal assets. All they can come after is the company. THAT is the reason to set one up. Don't co mingle funds and keep all the meeting minutes and it works.

Now other states may be different. But one person CAN own an LLC and enjoy all the protections.

Yes keep cheering for your imaginary team.

It is impossible not to be sued if someone is of a mind to. It IS POSSIBLE to protect your PERSONAL assets from said lawsuits. That is what smart people do.

The idea that you can buy insurance and somehow their lawyers fight for you is just silly. They do not get into long protracted cases for you. If that was the idea then nobody would have an LLC.

It is such a bad idea to listen to this advice. You are on the right track with talking to people who know as opposed to those who think they know. Don't let anyone here deter you. Including me. Find advice from local knowledgeable experts.

IF you do it with just insurance and a kid chokes on a balloon then it is going to be your house and savings they come after EVEN WITH the insurance company lawyer. With an LLC properly set up it ends there. But go ahead listen to Mike and Tom and their imaginary team.

Odds are good nothing will ever happen. You will never have to worry about it. It is the just in case you need it idea. And when you do you have to decide how much you really want to risk.

Danny, you right in a way. A small way.

Problem is, YOU are the company, and in most cases you will have to be the cosigner for the business dealings
which brings you right back into it. One example: Do you really think a bank is going to loan money to your one
man company and not hold you responsible.

But still I will agree, it has some benefits. Just not as many as most think.

With the insurance, yes indeed an insurance company will bring out their big gun lawyers and fight for you before they
will pay out a large insurance claim. I've seen it happen.

Tom

Yes Tom. I have business loans using my EIN for cars and equipment. I think once you have established your company as a credit worthy entity they happily do it. You start with gas cards as they are fairly easy. Then Grainger ans Uline generally offer net 60 terms and you establish and build credit with companies that report to credit bureaus.

I have to say it doesn't happen overnight but it is the smart way to do things.

I am shocked that you own dozens of companies and don't seem to know this.

I had one company I closed and it never affected anything personal or the other companies. This is how you do that stuff. The benefits are exactly as I say and again the veil between you and the company remains intact as long as you do things right.

What am I wrong about exactly? This is how I operate our companies and you are telling me I am wrong?

As for insurance lawyers it all depends on what you are insured for. Once they reach the cap of the policy YOU are on the hook.

As for credit and liability you are comparing apples and hand grenades.

Again I think the best move is to have tim and everyone search their own locality for the right answer. It will vary tremendously depending upon that.

No I'm not saying it is wrong for you. But like you said, that was a long time in the making.

But I do know for a fact, any set up can't replace insurance as you best protection against lawsui


And again, I do agree, anybody does need to talk with the local experts before acting on anything said here.
My point is it doesn’t hurt to talk and ask questions on here to get a general idea of what to ask the experts.

Tom

You can't run a company without insurance or at least shouldn't. Nobody said anything else.

Anything worthwhile takes time. I never said it was a long time but I guess that is a mater of perspective.

Regardless of the credit it limits liability.

There are disadvantages with an LLC for a start up business, so one should ask about those too when talking with the experts.
Don’t just assume it’s the only option.

Like the expert joking told me years ago, if you think the LLC is perfect protection for a startup business; start it and go down
to the bank and borrow a million dollars, and then go home and forget the business. It has limits for sure.


Tom

In regards to the SS4, my accountant shared that he has seen identity theft significantly increase in recent years and said he advises if at all possible avoid giving out your social security number. Completing an SS4 form would allow me to avoid giving out my SSN whenever I give a client a W-9.

So you think you can borrow a million dollars not having one? Nice staw man you have there.

Wny exactly would does one need to borrow a million dollars?

Regarding setting up an LLC for protection, and to help with the topic here, this is a good article:

http://www.litigationandtrial.com/2009/0......lawsuit/

A couple of quotes from it:

"Conducting your personal business through an LLC provides no protection against a tort verdict, the type of liability that most people are worried about.
The use of corporate forms — like LLCs, S-Corporations, or Incorporation — has many important purposes, but avoiding personal tort liability for your own
conduct is not one of them."

“Assume you hit a pedestrian with a car, defame someone in a blog post, or cause a building fire. It doesn’t matter if you were “employed” by
your LLC when you did it — you will still be personally liable, as will the LLC that “employed” you.”

Tom

You are also not protected against murder or rape. So what? NOBODY said that personal tort liability was something you can hide behind an LLC for. So another straw man for no reason.

If the only reason anyone wants to start an LLC is to avoid personal responsibility for committing crimes then there is no need to start one. My understanding was he was interested in conducting legitimate business. Sorry if I misinterpreted.

Well said, Tom.

The only one I had interest to benefit was Tim. I did not want to send him away to a different link going through so many other pages to read. I wanted to help support him by spending time searching for what is best that's fits his situation. It is called "Teamwork."

Some teams are so far behind they think they are winning.

But that aside my question is of what benefit is there to setting up things wrong exactly? Why do it? In the long run it costs more money.

Now if all you want to do is work on the side and do a few parties then no biggie. But is there some benefit to setting up things wrong that I am missing? I just don't see the point of intentionally doing things wrong.

By the way the penalties in many states for doing things wrong are sort of hefty. Again forget the "Team" nonsense and get sound advice from someone in your locality who knows all the local rules. Don't listen to me or anyone as a final word.

I would highly advise a blend of the approaches. It's good advice to know a little bit about what your financial team is doing on your behalf. Unless you plan a second career then learning all the intricacies is a long shot, but knowing the basic and general rules are certainly advisable. Find someone with a professional designation. You do not have to be a CPA to do tax work. There are plenty of con artist out there playing the system. Use a CPA or Enrolled Agent. Beware of anyone telling you something that sounds to good to be true. Someone who does comedy and magic told me one time that their accountant advised them they could write off a video set by Chris Rock as an "educational expense"(true story).

I agree with Danny that setting up an LLC and getting an EIN is a wise idea. It's not going to make or break your business, but there are a lot of things that are much easier than simply doing your business as a DBA. From the tax side you can operate as an S-Corp. It's easier to file other tax forms, deal with banks, credit bureaus, and other vendors when using an EIN and a business name. Your LLC is registered with the state so it adds some legitimacy.

I'll reiterate what I said above. Have a professional do your taxes. The IRS will go after small business owners/operators and will eat you alive. I've seen it happen and more than you would think. If you are ever audited having someone who knows your business to help defend you can be invaluable.

Regards,

Jordan