Re: Starting a Limited Liability Company?
 

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get a good lawyer. worth every penny.

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Unless you have particular clauses you want to include in your LLC or have multiple partners, setting up an LLC was super-easy for me without a lawyer. The Secretary of State page for your state will walk you through the process.

Also, if you get a lawyer, be sure they're not charging a bunch of money on top of the registration fee. I think I saw some legal service offering a $550 LLC formation in Illinois (the fee in Illinois is $500) so they had a 10% markup. Just do your research.

Re: Starting a Limited Liability Company?
 

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Gugel,

I'm pretty sure that as long as you don't pierce the corporate veil of your LLC (by keeping business and personal expenses separate), then you aren't personally liable in a personal injury lawsuit (although your company sure is). Again, I'm not 100% and it may vary by state, but that is my understanding.

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I'm pretty sure officers/managers can be responsible for personal injury. Let's take a gross example. You get a shipment of soy beans from your supplier in China. You test the quality and find levels of toxins that are very clearly hazardous. You're like "meh, whatever, no one cares" and decide to sell the soy beans anyway. People buy your soy beans, eat them, and die. Your corporate shield ain't protecting you.

Re: Starting a Limited Liability Company?
 

Yeah, that's malicious though. There's a major difference.

Re: Starting a Limited Liability Company?
 

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So lets say I start an LLC. Let's say I earn $100,000 in ten months. I reinvest about $30,000 in manufacturing, advertising, and website upkeep. The remaining $70,000 is pure profit which I pay to myself. If someone sues me in month eleven are they able to go after that $70,000? Say I make three million dollars in five years...2/3 of which is profit...what could someone suing the LLC potentially take?

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Umm... IIRC once you pay yourself, that money is now yours. They can take everything the LLC owns though.

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here's another asset protection aspect of LLCs. in florida and probably in more than a few jurisdictions, if you are sued personally and someone obtains a judgment against you, they are only entitled to what is called a charging lien. a charging lien only entitles the holder to a percentage of any cash distributions that are paid out of the LLC to the owner. in a corporation scenario, a judgment holder can petition a court to seize the owner's shares to satisfy the judgment.

i just had my law firm changed to a PL, which is the professional equivalent of an LLC, at the suggestion of an asset protection lawyer for that very reason

Re: Starting a Limited Liability Company?
 

I just talked to my CPA and he set up everything for a fee. In addition there's a yearly $50ish fee, and that's it. Then I took my little certificate to the bank, got bank accounts set up (with a copy of the minutes appointing each person to their position) and bam, you're good to go.

SUPER EASY...in washington you should be able to get the whole thing set up for $300 or less.

Re: Starting a Limited Liability Company?
 

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Gugel,

I'm pretty sure that as long as you don't pierce the corporate veil of your LLC (by keeping business and personal expenses separate), then you aren't personally liable in a personal injury lawsuit (although your company sure is). Again, I'm not 100% and it may vary by state, but that is my understanding.

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This is 100% exactly the reason why I set one up. I don't want some drunk renter's friend doing something stupid then suing me. (basically you can set up a LLC for every property or every 3-4 or whatever you want...that way if you do lose a big lawsuit you can limit your risk to at worst losing those properties in the LLC)

However as stated elsewhere, in the case of GROSS neglegence etc. (like you KNOW the food you're selling is going to kill people etc. or you KNOW your properties have black mold and it's only a matter of time before someone dies from it) then yes, the LLC veil is deystroyed and you're going down. But that's only extreme cases.