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LLC and personal assets
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tri dpt
Jan 16, 17 15:51
Post #1 of 9 (830 views)
Does an LLC protect personal assets as well as it is designed to?

I have set up an LLC to sell a product online. Product liability insurance is too expensive at this time to be worthwhile.

IF someone were to file a lawsuit against the product/company, would ALL my personal assets be protected? This is my understanding of the point of the LLC.

I have been told that if a lawsuit is ever filed, you can just dissolve the LLC and then start a new one...? That seems to easy.

Any Holiday Inn advice would be appreciated.
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Re: LLC and personal assets [tri dpt] [ In reply to ]
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wdrhoads
Jan 16, 17 17:57
Post #2 of 9 (791 views)
need to make sure all accounting and banking is in LLCs name, all contracts in LLC's name, you sign documents as manager or member of LLC, that you have an operating agreement, and folks know they are dealing with the LLC and not with you individually. all of that would help. the biggest concern is co-mingling of assets which can lead to seeing through the LLC's liability protection and attaching your assets instead.
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Re: LLC and personal assets [tri dpt] [ In reply to ]
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windywave
Jan 16, 17 18:14
Post #3 of 9 (777 views)
What he said plus you should check with an attorney in your state because a single member LLC may not provide limited liability.
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Re: LLC and personal assets [tri dpt] [ In reply to ]
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TheForge
Jan 16, 17 19:37
Post #4 of 9 (723 views)
Also, vendors may require persona guarantees if sufficient credit history does r exist for he llc. That basically is a waubfor them to go after you personally.
"In the world I see you are stalking elk through the damp canyon forests around the ruins of Rockefeller Center. You'll wear leather clothes that will last you the rest of your life. You'll climb the wrist-thick kudzu vines that wrap the Sears Towers. And when you look down, you'll see tiny figures pounding corn, laying stripes of venison on the empty car pool lane of some abandoned superhighway." T Durden
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Re: LLC and personal assets [tri dpt] [ In reply to ]
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rus
Jan 16, 17 20:00
Post #5 of 9 (717 views)
You should look into whether intentionally under-capitalizing or under-insuring an LLC would allow a court to "pierce the corporate veil" and hold the owners personally liable. Given that you are selling online, jurisdiction may be a topic to look into. Long arm statutes would be another topic to read up on.
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Re: LLC and personal assets [tri dpt] [ In reply to ]
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japarker24
Jan 17, 17 7:32
Post #6 of 9 (670 views)
I've always thought of LLCs as a half ass way of trying to protect yourself. Why not just go full incorporation?
Pink? Maybe. Maybe not. You decide.
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Re: LLC and personal assets [japarker24] [ In reply to ]
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champy
Jan 17, 17 7:37
Post #7 of 9 (664 views)
japarker24 wrote:
I've always thought of LLCs as a half ass way of trying to protect yourself. Why not just go full incorporation?

I was thinking the same thing.
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Re: LLC and personal assets [japarker24] [ In reply to ]
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TheForge
Jan 17, 17 7:47
Post #8 of 9 (652 views)
That is what I did. A couple more steps each year to keep registrations current, but overall much easier. Especially when you work across state lines. Some states are very leery of LLC from other states doing business in their state. Especially if sales tax is an issue you have to deal with.
"In the world I see you are stalking elk through the damp canyon forests around the ruins of Rockefeller Center. You'll wear leather clothes that will last you the rest of your life. You'll climb the wrist-thick kudzu vines that wrap the Sears Towers. And when you look down, you'll see tiny figures pounding corn, laying stripes of venison on the empty car pool lane of some abandoned superhighway." T Durden
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Re: LLC and personal assets [japarker24] [ In reply to ]
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rrheisler
Jan 17, 17 7:52
Post #9 of 9 (647 views)
Depending on state, there can be tax implications and/or winding down considerations that may make an LLC more viable than other corporate entities.

That being said...the OP needs some type of insurance under the "you can be sued at any point in time for anything" provision. It may not have merit, but you have the cost of defending yourself to consider.

Disclosure: I work for a business insurance carrier.
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