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Do CRs need an LLC? What does everyone do for liability?

To avoid your house being taken in a lawsuit? Or does it never happen to us? My husband was just asking/stressing I should be LLC. He's been in the roofing/contracting industry his whole life, so thinking on those terms. Thanks for any thoughts/advice.
Rho

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Permalink Reply by Quyen on May 3, 2009 at 17:53

Disclaimer: I'm obviously not an attorney, so what I am about to write should in no way, shape or form be regarded as legal advice. Just sharing a little knowledge I have on the matter.

What your husband is speaking of is asset protection, and there are several business entity forms or vehicles that will protect your personal assets in the event of a lawsuit against you: LLC (limited liability corporation), LP (limited partnership) and trusts. CRs could incorporate themselves (i.e., Rhoda Collins, Inc.) to achieve this purpose. As to the "need" to form an LLC or any such entity, I think that would be a personal choice.

In our particular line of work, CRs could get what's called Errors & Omissions insurance, which does provide asset protection. This is relatively affordable at $500/year for $500,000 coverage.

But ... to determine which is best for you, your CPA/an attorney would be the best people to discuss this in more detail with you. :)

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Permalink Reply by Rhoda Collins on May 3, 2009 at 19:24

Thanks. I was going to talk with both, just wondered if it was a common practice or such. :) Thanks again!
Rho

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Permalink Reply by Quyen on May 3, 2009 at 19:33

I only know of two reporters who are incorporated. I used to have E&O, but haven't had it for years. :)

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Permalink Reply by Rhoda Collins on May 4, 2009 at 10:16

Thanks, Veronica!

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Permalink Reply by Rhoda Collins on May 4, 2009 at 17:58

I've heard of Marsh. Had called my ins co to see if they do it...they are looking into it, so will go from there. Yes, got your email. TY! :)

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Permalink Reply by Stephanie P Borthwick on May 8, 2009 at 11:28

I am incorporated and did it on the advice of my accountant. It has saved me a bunch of money in taxes. You should definitely consult with your own accountant to see if it's right for you. Everybody's situation is different. I did pay an attorney to do the incorporation paperwork and would not recommend that. It's apparently fairly simple to do it yourself, just FYI. I would much rather have paid less then $900 to an attorney.