My thoughts also not being a lawyer, but having thought about staying at a Holiday Inn Express last night are below and only because no one presented another opinion.
On Feb 9, 2010, at 6:49 PM, Kee Nethery wrote: > I'm not a lawyer so my words are just my thoughts, not legal advice. That > said ... > > It is my understanding that the "Limited Liability" that a corporation > provides is based upon the concept of "piercing the corporate veil". Can the > customer who sues your company, pierce the corporate veil and get to you > personally? > Yep. Furthermore, if you get sued then corporate protection or not you will lose without money to protect yourself. There are two ways to protect yourself; liability insurance and corporate structure. > In general, if you are the corporation, ie you are the only employee, and you > made all the decisions, and if you mess up big time, and someone wants to sue > you personally, it is going to be difficult for you to claim that you should > personally be protected just because you are an LLC. > I was told differently with regard to a real corporation (I have no experience with an LLC). If you don't operate as a corporation, do mix business and personal expenses/bank accounts, don't keep the paperwork up, do sign your name without corporate identity and title, have no assets, do not have corporate transactions (contracts, checks, etc), or otherwise operate it as a personal extension of yourself then the corporate veil may be easily pierced. But, there are specific guidelines and laws to be able to go after an owner personally. It's my understanding that it is not who makes the decisions or how many employees you have but how the corporation is run and was it clear to the people you interacted with that they were dealing with a corporation or not. It can be a lot of work if you don't know what you are doing, but it's really easy once you get the hang of it. It does however, cost more than an annual payment to the government. I agree with the intent of Kee's comment; if you incorporate and then run the corporation as a sole proprietorship then you may have given up your rights to limited liability. If you don't know the difference, then there is probably no protection from a corporation. However, I believe the laws are designed to protect a single owner corporation with no employees, at least here in the Midwest. Each state may be different. > If you have employees and they do most or all of the work and you manage > them, and they mess up, if you are a sole proprietor, the customer can sue > you personally. But if you have employees who messed up and you are a > corporation, then you personally are way better protected because there is > not a direct line from screwup to you personally through all the employees > who might have contributed to the issue. The corporation can lose a lawsuit > and the company can disappear but they would have difficulty piercing the > corporate veil to go after your personal property. > > In a nutshell, if it is just you, the protection you get by being an LLC is > probably very close to nil. > > And again, I'm not a lawyer so ask someone who really knows. > > Kee Nethery >
