Do I need to be an LLC

[Polaris]

What is the name of your state? CA

I build and sell products on the internet. I am sole proprietor. I do not borrow money or buy supplies and materials on credit, I pay cash for all business expenses. There is always the possiblity I could be sued for any number of reasons, of course. I have been told an LLC will not offer any protection against law suits in CA.

Would I benefit any from forming an LLC?

Thanks

 

[tranquility]

The question is not simple. There are always issues regarding piercing the corporate veil and some things (trust fund taxes or environmental lawsuits) which can go against responsible indivduals in the corporation (or owners) as well as the corporation itself.

But generally, a Limited Liability Company (LLC) tends to limit liability against the owners. What you might have heard regards protection in a bankruptcy of a single member LLC when it is the owner who has the debt.

 

[clueless3]

Yes, you would benefit GREATLY from forming an LLC, for a number of reasons:

* The members of the LLC are limited in their losses to the assets of the LLC. Yes, a sharp lawyer can possibly pierce the corporate veil and sue the members directly, but it's a big deterrence.

* Tax savings.