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Last Post:
Nov 3, 2009 5:10 PM
by: amys-titles
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Posts:
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partnership or LLC - how do you structure your bookselling business?
Posted:
Nov 3, 2009 12:04 PM
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I've been operating as a sole proprietor but want my sister to join my business. It would be easy to set up a simple partnership, but that business structure doesn't protect us in case we are sued. It seems unlikely, but I don't want to take unnecessary risks. How do most folks set up their businesses legally? Did you use a lawyer or use a web service or book? Thanks...
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6,592
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10/20/08
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Re: partnership or LLC - how do you structure your bookselling business?
Posted:
Nov 3, 2009 12:08 PM
in response to:
flembooks
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I will share a secret with you.
Nothing other than insurance will protect you if you're sued. If you are an officer of a corporation, you are likely to be names in the lawsuit along with the corporation.
If you have a silent partner who invests but is not an officer and does not particpate in the operations of the corporation they are unlikely to be named, and are solely at risk for their investment in the corporation.
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5,585
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Re: partnership or LLC - how do you structure your bookselling business?
Posted:
Nov 3, 2009 12:42 PM
in response to:
lakewoodassocia...
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You are notorious for not giving accurate information. I recall an old post of yours telling me how I could get health insurance for like $150 a month. You use exceptions to general guidelines as a way to prove a point that isn't as B&W as you think.
I have the most recent NOLO "Legal Guide for Running and Starting a Small Business," copyright 2009. It was just released.
Pg. 13: "One of the main advantages of incorporating is that, in most circumstances, it limits your personal liability."
They mention two exceptions - certain creditors which demand personal guarantees from corporate officers and personal liability for "obvious" negligent personal behavior. Yes, NOLO does recommend buying insurance and states that insurance combined with a sole proprietorship or partnership might be sufficient. The OP would need to probably talk to a lawyer to figure out the best path for them.
As I recall, you're the one who sends the IRS all your personal records along with your tax return as if they want to see all your receipts when you haven't even been audited.
Flem: Buyer beware in terms of taking legal advice from lakewood. And don't take my advice or advice from anyone else here. You need to talk to a lawyer if you think you have legitimate reason to worry about potential lawsuits.
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Re: partnership or LLC - how do you structure your bookselling business?
Posted:
Nov 3, 2009 3:03 PM
in response to:
elphaba_www_books
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> You are notorious for not giving accurate
> information. I recall an old post of yours telling
> me how I could get health insurance for like $150 a
> month. You use exceptions to general guidelines as a
> way to prove a point that isn't as B&W as you think.
>
Not me - but someone did point out that under the Obama Stimulus an unemployed person who had insurance could continue their coverage under Cobra with a 65% subsidy. Which could very well bring it to under $150/month.
> I have the most recent NOLO "Legal Guide for Running
> and Starting a Small Business," copyright 2009. It
> was just released.
>
> Pg. 13: "One of the main advantages of incorporating
> is that, in most circumstances, it limits your
> personal liability."
Note the "in most circumstances". If your corporation is sued that is true. But rarely is only the corporation sued. The officers who have executive authority are also included in the suit. A jury decides whether the officer has been negligent and the extent of an officer's liability.
>
> They mention two exceptions - certain creditors which
> demand personal guarantees from corporate officers
> and personal liability for "obvious" negligent
> personal behavior. Yes, NOLO does recommend buying
> insurance and states that insurance combined with a
> sole proprietorship or partnership might be
> sufficient. The OP would need to probably talk to a
> lawyer to figure out the best path for them.
>
In practical terms, any debt which a small business holder is likely to take on will require a personal guarantee.
> As I recall, you're the one who sends the IRS all
> your personal records along with your tax return as
> if they want to see all your receipts when you
> haven't even been audited.
>
Not me.
> Flem: Buyer beware in terms of taking legal advice
> from lakewood. And don't take my advice or advice
> from anyone else here. You need to talk to a lawyer
> if you think you have legitimate reason to worry
> about potential lawsuits.
I have offered no legal advice. I have simply pointed out a common misconceptions which people with no practical business experience have about liability.
You are always at risk.
Message was edited by:
lakewoodassociates
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Re: partnership or LLC - how do you structure your bookselling business?
Posted:
Nov 3, 2009 5:10 PM
in response to:
flembooks
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You can structure a limited liability company that has partnership aspects to it. Talk to a small business accountant or an attorney. Do your own research first and then hire an expert to actually deal with your states requirements. You don't have to contact a corporate attorney just start calling general practice attorneys and ask if they incorporate businesses and how much they charge.
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