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Arks

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I was just reading this article about KFC being ordered to pay over $8 million in a food poisoning lawsuit.
Not commenting on this particular case, but it's sure a reminder that any business can get hit with a bigger damages award than their liability insurance can cover, so it's really important that your business be protected as a limited liability company in some way. Otherwise, as a sole proprietorship, once they've taken the assets of your business they can come after your car, your cabin at the lake, and everything else you own.
Am I right about this?
 

Proud Texan

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That's what our lawyer told us. We're an LLC with separate liability from our personal property.
 

Breakfast Diva

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You're right about that Arky! We're a subS corp. Land and buildings are personal property..something happens, all they can get is the insurance and whatever we have in our corp account.
 

gillumhouse

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When I opened this was complicated. In my Aspiring classes I recommend setting up as LLC or something like it as a protection of personal assets.
 

Colleen848

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My son is what I guess you'd call an accountant. He is really sharp for such a tender age.
He mentioned all of this S Corp, etc. to me. I looked up what I could on the internet to save attorney fees. I know it's not the best info compared to an attorney.
My problem is I AM a sole proprietor. No DH or DW. Not even a D child so I guess I will have to consult an attorney. Hate to admit that either my kids (4) are either too young or I don't completely trust them.
I'm not sure if laws change from state to state. I am in New York. I work(ed) for GM/Delphi/GM LLC. I do know they both chose their "bankruptcies" in NY although both compainies were headquartered in Michigan. My physical workplace never changed. I did not want to chase GM around the country! Let me make this clear because it has caused a fuss: DO NOT THINK THIS IS A POLITICAL COMMENTARY.
I always figured it was because the laws here are different. Never made sense to me.
 

Madeleine

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My son is what I guess you'd call an accountant. He is really sharp for such a tender age.
He mentioned all of this S Corp, etc. to me. I looked up what I could on the internet to save attorney fees. I know it's not the best info compared to an attorney.
My problem is I AM a sole proprietor. No DH or DW. Not even a D child so I guess I will have to consult an attorney. Hate to admit that either my kids (4) are either too young or I don't completely trust them.
I'm not sure if laws change from state to state. I am in New York. I work(ed) for GM/Delphi/GM LLC. I do know they both chose their "bankruptcies" in NY although both compainies were headquartered in Michigan. My physical workplace never changed. I did not want to chase GM around the country! Let me make this clear because it has caused a fuss: DO NOT THINK THIS IS A POLITICAL COMMENTARY.
I always figured it was because the laws here are different. Never made sense to me..
Being the only owner doesn't matter. You can form a corporation with just yourself as all of the principals. It's a 'relatively' cheap way to protect yourself from lawsuits.
 

Colleen848

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My son is what I guess you'd call an accountant. He is really sharp for such a tender age.
He mentioned all of this S Corp, etc. to me. I looked up what I could on the internet to save attorney fees. I know it's not the best info compared to an attorney.
My problem is I AM a sole proprietor. No DH or DW. Not even a D child so I guess I will have to consult an attorney. Hate to admit that either my kids (4) are either too young or I don't completely trust them.
I'm not sure if laws change from state to state. I am in New York. I work(ed) for GM/Delphi/GM LLC. I do know they both chose their "bankruptcies" in NY although both compainies were headquartered in Michigan. My physical workplace never changed. I did not want to chase GM around the country! Let me make this clear because it has caused a fuss: DO NOT THINK THIS IS A POLITICAL COMMENTARY.
I always figured it was because the laws here are different. Never made sense to me..
Being the only owner doesn't matter. You can form a corporation with just yourself as all of the principals. It's a 'relatively' cheap way to protect yourself from lawsuits.
.
Thanks, everything I had read talked about partners, board meetings, blah, blah, blah!!
 

gillumhouse

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My son is what I guess you'd call an accountant. He is really sharp for such a tender age.
He mentioned all of this S Corp, etc. to me. I looked up what I could on the internet to save attorney fees. I know it's not the best info compared to an attorney.
My problem is I AM a sole proprietor. No DH or DW. Not even a D child so I guess I will have to consult an attorney. Hate to admit that either my kids (4) are either too young or I don't completely trust them.
I'm not sure if laws change from state to state. I am in New York. I work(ed) for GM/Delphi/GM LLC. I do know they both chose their "bankruptcies" in NY although both compainies were headquartered in Michigan. My physical workplace never changed. I did not want to chase GM around the country! Let me make this clear because it has caused a fuss: DO NOT THINK THIS IS A POLITICAL COMMENTARY.
I always figured it was because the laws here are different. Never made sense to me..
Being the only owner doesn't matter. You can form a corporation with just yourself as all of the principals. It's a 'relatively' cheap way to protect yourself from lawsuits.
.
Thanks, everything I had read talked about partners, board meetings, blah, blah, blah!!
.
Limited Liability Company protects your assets from the business assets. It used to be only bigger companies (corporations) but things were revised for us little guys to be able to be one. I would probably go to the trouble of changing from sole prop to LLC if I were younger. For me it is not worth the effort - my kids will not want my B & B and DH & I are too old to really give a fig. Nothing to protect - or worth protecting. IF you are young (as most here are) or have kids - you aspiring or newbies - do the LLC, S Corp or whatever - because if the bubble bursts, you need your assets protected.
 

Generic

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Little different this side of the border. Damages are limited to actual damages and our insurance covers $2M.
 

Arks

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Little different this side of the border. Damages are limited to actual damages and our insurance covers $2M..
Eric Arthur Blair said:
Little different this side of the border. Damages are limited to actual damages and our insurance covers $2M.
How do they assess actual damages if, say, the business owner's negligence leads to food poisoning causing horrible brain damage to, say, a CEO earning $4 million a year through a 30 year career?
 

Generic

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Little different this side of the border. Damages are limited to actual damages and our insurance covers $2M..
Eric Arthur Blair said:
Little different this side of the border. Damages are limited to actual damages and our insurance covers $2M.
How do they assess actual damages if, say, the business owner's negligence leads to food poisoning causing horrible brain damage to, say, a CEO earning $4 million a year through a 30 year career?
.
That's for the lawyers and courts to figure out.
CEOs don't have that kind of salary for that long. They usually don't last more than a few years. Punitive applies only to malice around here. Government requires us to have a $2m policy to get our licence.
 

Sanctuary

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Little different this side of the border. Damages are limited to actual damages and our insurance covers $2M..
Eric Arthur Blair said:
Little different this side of the border. Damages are limited to actual damages and our insurance covers $2M.
How do they assess actual damages if, say, the business owner's negligence leads to food poisoning causing horrible brain damage to, say, a CEO earning $4 million a year through a 30 year career?
.
Arkansawyer said:
How do they assess actual damages if, say, the business owner's negligence leads to food poisoning causing horrible brain damage to, say, a CEO earning $4 million a year through a 30 year career?
That will vary from state to state and can be a very complicated calculation requiring expert economists and vocational rehabilitation experts. Loss of earning capacity for a large wage earner can be huge - it's a matter of doing the math and then bringing the number back to present value. In a brain injury, there are economic damages and non-economic damages. Some states have caps under certain situations. A brain injury case can easily add up to more than $5 million in damages on an ordinary person, or even someone who has never worked his/her entire life, but those cases will typically settled for something considerably less. And if the person dies, throw in loss of net accumulations damages....Like I said...it's very complicated.
Back to the main topic - I did the Delaware LLC thing and my LLC has $1 million in liability and $850,000 in environmental coverage (fuel spill). That's usually sufficient to cover most anything that could happen here - on any injury here, there is a TON of comparative negligence on the part of the injured person which is why $1 million is usually sufficient. Fire is about the only thing that is somewhat defenseless, unless the guest started the fire. I personally own nothing other than a 13 year old car and the mortgage on the boat. So, if there was a claim/judgment that exceeded my liability coverage, in order to seize the LLC's asset which is the boat (which I keep mortgaged to the hilt, but I hold the note), they'd have to pay ME off on the mortgage, since the mortgage is primary to the asset, before taking the boat and that will never happen. I hope I never have to test the theory. :)
 

Proud Texan

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I was thinking about this liability when I watched The Conspirator directed by Robert Redford as an innkeeper is tried for the assassination of President Lincoln. I kept saying "See, it's always the innkeepers fault!".
Joey Bloggs said:
I was thinking about this liability when I watched The Conspirator directed by Robert Redford as an innkeeper is tried for the assassination of President Lincoln. I kept saying "See, it's always the innkeepers fault!"
That wouldn't have happened had it been "Mary Surrat's Boarding House, L.L.C." (Unless of course L.L.C. stood for Long Live the Confederacy!)
 

One Day

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