LLC Formation: Is it Necessary? A Small Business Owner's Perspective

[SeeMe4PC]

Hi there!

I recently had a friend very concerned about the fact the I am not set up as an LLC (limited liability company). His concern was more about if someone sued me after a show due to food poisoning, etc. While it would be completely unlikely - he said it could happen and I should at least look into it. He says there a few tax benefits for it, too.

I am in the process of reviewing the Policies and Procedures and general information off the internet about becoming an LLC. (sigh)

Has anyone ventured here before and have any comments?

Thanks in advance,

Tara

 

[pjpamchef]

WOW! Sounds like my ex! Does he have a dark cloud following him around
I have been doing PC for over 11 years, and there are people who are in my group who are in the 15 year range. Never once heard of anyone being sued! In my previous life , (before children and PC), I was an Independant Sales Contractor. The last Co I worked for insisted we become LLC, for their benefit, not ours! It was to insure them against us coming back to them and saying "we were employees, pay our SS taxes". It was costly to have it set up. Before you go to any of this expense, I would have a talk with HO and ask them what the $2 a month we pay covers.

 

[wadesgirl]

I have never heard anything about that before!

 

[Jessamary]

Isn't this why we pay our $2 a month for demonstrator insurance?

 

[Jules711]

Yes, the insurance it to cover any issues. I know someone that needed it. Something in the host kitchen broke (dropped a stone or something). PC took care of replacing it!

 

[Chefgirl2]

If the hostess bought the food then she would be liable, not you. There is no way for us to know how long the cream has been on the counter or if her freezer was out for a week without her knowledge.

You do have me thinking whether I should bring the food with me and have her reimburse me anymore...

 

[koima]

You do not need to be an LLC because we're part of a corporation and liability insurance comes from them. Unless you're making quite a bit of money with PC, you don't need the extra tax benefits that an LLC provides.My husband recently incorporated his business so I know a bit about this! We wanted to separate the business income from our personal income for tax purposes, but it wasn't until the business was grossing over $100k a year that it really became an issue for us. He had insurance and such as a sole proprietor as well.