| Author |
Message |
leannewinslow
Frequent Member
Joined: Aug 26, 2007
Posts: 335
Location: Seattle, WA
|
 Posted:
Tue Jul 22, 2008 11:14 pm |
  |
Ok, tonight we discussed the business organization stuff...
sweetiemama is right.
It is only a slightly higer fee for the business lisc. and in the end you actually end up paying the same taxes, at least in my state.
As a SP you are personally liable, which means you could lose your home if you loss a law suit. As an LLC the business is only liable for the amount of the assets.
Obviously insurance is necessary for both scenarios.
You don't need to become a corporation (C or S type) unless you will have many owners, for example: shareholders. |
|
|
    |
 |
|
|
|
loriemoms
Forum SuperStar!
Joined: Nov 09, 2005
Posts: 2638
Birthday: Feb 12
|
| Posted:
Wed Jul 23, 2008 3:46 am |
|
| sweetiemama wrote: | | Personally, as a former paralegal, I would incorporate. It may be more money, but you are protecting your family and yourself in the long run. Down the road, you may very well recoup L.L.C. costs by not having someone go after your personal assets should they have an accident on your business premises or even become sick with food poisoning. I have heard the advice given not to incorporate to make things "more simple". But things could get extremely complicated should an issue of liability arise. |
That is what I was curous about...because I have heard that LLC does NOT protect you against libility if you have no employees. That they can sue the company, but they also can sue the individual involved in the creation of the cake if they get sick (which is you). |
|
|
 |
|
|
sweetiemama
Regular Member
Joined: Jan 15, 2007
Posts: 136
|
| Posted:
Wed Jul 23, 2008 4:15 am |
|
I don't know the ins and outs of the law like an attorney, so I can't answer whether someone could sue you personally for making the cake. I have always been warned to incorporate (from college professors) because it protects your personal assets. I would ask how they can go after you personally (what is your personal liability) if you make the cake and are an L.L.C.. In another scenario, can I sue a chef who made the food that gave me food poisoning? I am not sure about that advice that you could be sued because you made the cake. The L.L.C. is created to protect the person in business from losing everything in the event their business is involved in litigation. Obviously, check with an attorney  |
|
|
 |
|
|
Jocmom
Frequent Member
Joined: Sep 24, 2007
Posts: 378
Location: Port Huron, Michigan
Birthday: Apr 05
|
| Posted:
Wed Jul 23, 2008 4:27 am |
|
Wonderful post!
I guess I'm lucky - the bank that I work for has two on-site corporate attorneys and they work on the same floor that I do. They come to me for financial advice from time to time (I used to be licensed to sell mutual funds and annuities at another bank), or if they want to know where to buy a car (I work with all of the local dealerships). I ask them for legal advice from time to time. If they don't know the answer they call one of their associates. One of the nice perks of keeping my day job - and supplying my coworkers with a steady stream of baked goods never hurts.  |
|
|
 |
|
|
loriemoms
Forum SuperStar!
Joined: Nov 09, 2005
Posts: 2638
Birthday: Feb 12
|
| Posted:
Wed Jul 23, 2008 5:11 am |
|
| sweetiemama wrote: | | I don't know the ins and outs of the law like an attorney, so I can't answer whether someone could sue you personally for making the cake. I have always been warned to incorporate (from college professors) because it protects your personal assets. I would ask how they can go after you personally (what is your personal liability) if you make the cake and are an L.L.C.. In another scenario, can I sue a chef who made the food that gave me food poisoning? I am not sure about that advice that you could be sued because you made the cake. The L.L.C. is created to protect the person in business from losing everything in the event their business is involved in litigation. Obviously, check with an attorney |
I had an older sister who was hit by a delivery truck while walking down the street and unfortantly, did die. My mom sued not only the company that owned the truck, but also sued the driver, since it was the driver that was responsible for the accident. She lost the cases simply because the weather was very bad that day and my sister was wearing dark clothing..so it was demmed an accident because the driver did not see her walking down the street. (there was no sidewalk) Her attorney told her to sue the driver as well because this happens all the time, where you go after both the company and the party who caused the issue. I recently read of a caterer that was sued because one of their servers had a baterial infection that got the entire wedding sick and even some of the hotel staff! (it was not just a cold, but some sort of odd intestional thing) Both the caterer and the person who was sick was sued and they won the case.
If you are a home baker, your home is your bakery...simply being LLC from what I understand will not protect someone from taking your home/bakery if they sue you for millions of dollars of damage. But I have heard confllicting information and would love to know the true! I think home bakeries are just a puzzlement for many attornies..
Getting sick from cake is also just very hard to proove...unless its the only thing they served that day. And unless you are letting your stuff sit out for days and not being careful, I understand it is HARD to get sick off of cake! That is why many states do allow home bakeries without futhur inspections after the first inspection. (for instance, in our state home bakeries dont even fall under the health department like restaurants and such!) I personally think as soon as a home bakery gets sued somewhere and they win, we will see a lot of states changing this law... |
|
|
|
|
|
leannewinslow
Frequent Member
Joined: Aug 26, 2007
Posts: 335
Location: Seattle, WA
|
| Posted:
Wed Jul 23, 2008 10:28 am |
|
| loriemoms wrote: |
That is what I was curous about...because I have heard that LLC does NOT protect you against libility if you have no employees. That they can sue the company, but they also can sue the individual involved in the creation of the cake if they get sick (which is you). |
Sorry I didn't say this, I just remembered it after I read this post...
They could only sue the owner for more than the business's assets if they could prove that you had intended to cause them harm. Like you purposely used rotten eggs or something like that.
Now if you didn't intend them harm then it would be very dificult to prove that you did.
Not sure if you all heard about this eithr early this year or late last year...
Bride sueing Cake Maker because cake was not "exactly what she ordered" said it caused her distress b/c she was so embarrassed that her guests had to see that cake ad then for years after the wedding she was too upset to look at the wedding pictures etc. Way over the top.
After they couldn't settle it did go to court where the judge ruled that the cake was eaten so no refund was needed and that the cake maker had not intended to cause distress to the bride. So in the end Cake Maker won. The only $$ the bride could had gotten was if she had returned the uneaten cake she would have been entitled to a full refund.
so bottom line LLC DOES PROTECT YOUR PERSONAL ASSETS, unless you inteltially inflicted harm on the people eating cake. Pretty unlikely. Just to make it more clear, do not ever sell a cake to a person you have hard feelings with. |
|
|
|
|
|
Jocmom
Frequent Member
Joined: Sep 24, 2007
Posts: 378
Location: Port Huron, Michigan
Birthday: Apr 05
|
| Posted:
Wed Jul 23, 2008 11:28 am |
|
| loriemoms wrote: | | I had an older sister who was hit by a delivery truck while walking down the street and unfortantly, did die. My mom sued not only the company that owned the truck, but also sued the driver, since it was the driver that was responsible for the accident. She lost the cases simply because the weather was very bad that day and my sister was wearing dark clothing..so it was demmed an accident because the driver did not see her walking down the street. (there was no sidewalk) Her attorney told her to sue the driver as well because this happens all the time, where you go after both the company and the party who caused the issue. |
Sorry about your family's loss, loriemoms. It's a shame that the judge didn't use a little common sense and award your family something. (shouldn't the driver have been more careful in bad weather?)
So many people sue over trivial things because they are trying to get something for nothing. This was clearly not the situation in your sister's case. |
|
|
|
|
|
loriemoms
Forum SuperStar!
Joined: Nov 09, 2005
Posts: 2638
Birthday: Feb 12
|
| Posted:
Wed Jul 23, 2008 1:39 pm |
|
| leannewinslow wrote: |
so bottom line LLC DOES PROTECT YOUR PERSONAL ASSETS, unless you inteltially inflicted harm on the people eating cake. Pretty unlikely. Just to make it more clear, do not ever sell a cake to a person you have hard feelings with. |
my question is is that the judge would have ruled for the baker LLC or not....I would think having insurance would be enough.. |
|
|
|
|
|
indydebi
Forum SuperStar!
Joined: Jul 07, 2006
Posts: 15098
Location: Indianapolis IN
|
| Posted:
Wed Jul 23, 2008 4:12 pm |
|
| loriemoms wrote: | | they can sue the company, but they also can sue the individual involved in the creation of the cake if they get sick (which is you). |
I asked my attorney SPECIFICALLY about this when we got the LLC stuff rolling. He said it's common practice to list everyone and their brother on the "I'm going to sue you" list. It's like casting a big net and see what you pull in. But as my attorney, he would get the lawsuit against me personally thrown out in a heartbeat so the only thing left was the lawsuit against the LLC. |
|
|
 |
|
|
loriemoms
Forum SuperStar!
Joined: Nov 09, 2005
Posts: 2638
Birthday: Feb 12
|
| Posted:
Wed Jul 23, 2008 6:37 pm |
|
| indydebi wrote: | | loriemoms wrote: | | they can sue the company, but they also can sue the individual involved in the creation of the cake if they get sick (which is you). |
I asked my attorney SPECIFICALLY about this when we got the LLC stuff rolling. He said it's common practice to list everyone and their brother on the "I'm going to sue you" list. It's like casting a big net and see what you pull in. But as my attorney, he would get the lawsuit against me personally thrown out in a heartbeat so the only thing left was the lawsuit against the LLC. |
You have a good attorney then! I just don't want people thinking OK, I will get an LLC and will be protected against lawsuits.... |
|
|
|
|
|
|
|
