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Old 10-30-2012, 10:30 PM
CL&T CL&T is offline
LawnSite Senior Member
 
Join Date: May 2011
Location: New York
Posts: 491
Quote:
if you were to have a lawsuit filed against you, they could go after everything you have from your truck, trailer, equipment to your house, personal car and other personal belongings. However with an LLC, it will separate your business and personal finances. Again, should you be sued, they could only go after your business, not you personally, so your house and other personal belongings would be safe.
That's not exactly correct. True, if a creditor filed suit for a debt incurred by the LLC they would only be able to collect from the assets of the LLC, not your personal assets. BUT creditors are smart to that and will require a personal guarantee which means that if you default they can go after you personally. So your LLC, S corp or even a C corp will not protect you.

As for other suits, anything you are likely to be involved with as a small one man LCO is negligence. If they can show gross negligence on your part (say a rock gets kicked out by your machine and hits someone in the head making them a vegetable) your LLC, S corp or C corp once again will not protect you in a civil suit. Further, if your business is convicted of criminal charges the owners will be thrown in jail.

So what is a corporate organization good for? Tax advantages, partners, shareholders, estate planning, all of which unfortunately a one horse LCO making 20k a year has no use for.

Last edited by CL&T; 10-30-2012 at 10:39 PM.
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