Posted by EagleEye/NJ on 5/28/07 2:37pm
Msg #192401

Form a Company?

Is there any particular reason to form a company (D/B/A, LLC or Corporation) to do our signings if we are doing this full time? (Or maybe even part-time for that matter) I would think there might be a tax advantage but I am wondering about liability (I have E&O Insurance) or maybe it is even just a more professional representation of ourselves? Just curious. Thanks.

God Bless the men and women who so proudly serve to protect us and those who lost their lives with their unselfish acts of heroism. You are all so brave!

Reply by Kevin/Ct on 5/28/07 4:08pm
Msg #192421

No one should engage in a business without carrying liability insurance and seeking the protection provided by a corporation or limited liability company. They protect you against different liabilities. The liability insurance protects you against negligence claims. The LLC or corporate shield protects you against contract breach claims.

The purpose of the LLC or the corporate shield is to limit your liability to the funds at risk in the LLC or corporation. Your personal assets (home, personal bank accounts) remain separate from those of the corporation or LLC.

However, once you are incorporated or are a member of an LLC you need to observe the formalities of conducting business as a corporation or LLC. Otherwise you fail to raise the protection of the shield, and your personal assets are subject to claims. I just sued someone not to long ago in his personal capacity on a contract breach claim. He tried to argue that he had the protection of the LLC, but when he signed the contract he failed to indicate the name of the LLC and further failed to indicate that he was signing as a member/manager of the LLC. Consequently he lost...not because the LLC failed to protect him, but rather because he had failed to operate his business in an manner that would have given him the right to claim the protection of the shield.

Reply by Stamper_WI on 5/28/07 4:26pm
Msg #192425

Kevin

How is the LLC if they are DBA as another name. No mention of LLC in the DBA name

Reply by Kevin/Ct on 5/28/07 5:24pm
Msg #192436

Re: Kevin

It is possible for an LLC or corporation to be doing business under a trade name. This often happens when the LLC or corporation enters a new field. The name of the corporation may not reflect to type of business in which it is engaged. Therefore it is possible for the LLC or corporation to adopt a trade name and register it with the state.

In Connecticut this is accomplished by filing a trade name certificate in the town in which the business is located.

I did this several years ago when I owned a small restaurant. I formed a corporation. However, the name of the corporation did not reflect the food service industry in which it was engaged. So for $10.00 I registered it with the Town and indicated that it had adopted a trade name.

In Connecticut the following words must appear after a corporation's name....Inc. Incorporated, Corp, Corporation, Ltd. or Limited. I the case of a limited liability company the words...Limited Liability Company or LLC must appear after the company's name. The reason for this is that the other party to a business transaction has the right to know that he is doing business with an entity that has a limited liability. Failure to include these words after the name of the Corporation or LLC fails to invoke the protection provided by each, and results in personal liability. It is the obligation of one signing a document on behalf of a corporation or LLC to disclose both the identity of the corporation or LLC, and that he is acting as its agent. It is not the obligation of the other party to search for this information.

In the case of a trade name the letters dba must appear. For instance ABC, LLC dbA XYZ.
The dba indicates that the company has adopted a trade name.

Reply by Stamper_WI on 5/28/07 5:32pm
Msg #192438

Re: Kevin

Thanks. This Company was known only by the trade name. No LTd nothing in its contracts or advertising. I will have to study on this. Thanks Kevin!

Reply by Kevin/Ct on 5/28/07 6:22pm
Msg #192446

Re: Kevin

In Connecticut the signatory to a contract that signed using a trade name only without further designation of a corporation or LLC and that the signatory was acting as an agent on behalf of the corporation or LLC would render the signatory persoally liable

To avoid personal liability the correct signature for an LLC or a Corporation acting under a trade name would read as follows:

ABC, LLC dba XYZ

By _________________
Its Manager
Here Unto Duly Authorized

When presented with the issue of whether the LLC or the individual is liable, I sue them both. One or the other is alternately liable to me.