legal liability

[3t3d]

Originally Posted by turmite The cost of setting up an s corp will be more than an llc. Most of the cost will be the lawyers so don't tell them ahead of time what you really think of them! Just out of curiousity can you reveal what it is you are making without giving away any secrets?? Some products are inherently more liked to be misused than others. I make gunstocks and the product liability for products would be considerably less than, say, for a shop making a fully function firearm. Same is true for automobiles. The cost of insurance for a company making hoods or other trim parts for automobiles will be much less than that of the makers themselves. Mike ps My s corp that I started to set up would have cost me around $600 legal and about $100-200 regristration fees which are paid to the state.

I formed an LLC. About $700 in legal and other fees. Also asked about
liability insurance. My attorney told me that basically I was too small.
No attorney would bother going after a shop with a tens of thousands
in assets. Not worth their time!
A former customer is a very succesful, small mtorosports accessory
manufacturerer. They were so succesful, that they were bought up
by an $11M company. The lawers had them stop all production and sales
in a matter of days! Liability is not practical for them, and they became
an instant target. They were sold to become independant very quickly
and went back into business.
Bottom line, there is danger in numbers. Safety in staying small.

Secondly, if you only build to customers prints, there is not much risk.
YMMV

Pete

[broken003]

but if I understand correctly, the reason for forming the LLC (besides tax issues) is that your personal assets are seperate from those of the LLC?

[3t3d]

Originally Posted by broken003 but if I understand correctly, the reason for forming the LLC (besides tax issues) is that your personal assets are seperate from those of the LLC?

That's what I did it for. The assets in the company are seperate from your
personal assets. And you NEVER mingle the two after that.
Seperate accounts for personal and business, everything is seperate from
that point on. Or you loose the purpose of creating it.
And you need to keep i tclear that you are representing the LLC not yourself
personally.

Disclaimer. I am not a lawer, I don't even look like one.
Pete

[HuFlungDung]

I don't know that the directors of an LLC are really "limited in liability". Typically they are not, because a legal action will be brought against your company name, your name, your wife and your dog.

Limited liability really protects the common shareholders, if they are not the directors. It is the simple investor who enjoys the protection. That's my opinion.