1. This site uses cookies. By continuing to use this site, you are agreeing to our use of cookies. Learn More.

Why an LLC if it doesn't protect against legal malpractice?

Discussion in 'Business & Tax Advice' started by Brainzzzz, Jan 30, 2014.

  1. Brainzzzz

    Brainzzzz Newbie

    Joined:
    Jan 24, 2013
    Messages:
    29
    Likes Received:
    0
    For those who chose LLC over sole proprietorship, could you share why you chose that route?
     
  2. drywallrob

    drywallrob Jr. VIP Jr. VIP Premium Member

    Joined:
    Apr 27, 2011
    Messages:
    992
    Likes Received:
    476
    Sole proprietorship = zero protection.

    An LLC is a easy way to incorporate and offer you protection. I don't know about legal malpractice, but if you are an attorney (one who would need such protection) then you would know which structure would protect yourself the best.

    Posted via Topify using iPhone/iPad
     
  3. Brainzzzz

    Brainzzzz Newbie

    Joined:
    Jan 24, 2013
    Messages:
    29
    Likes Received:
    0
    Just wondering because i spoke to a CPA and what he said was LLC isn't worth it because it doesn't offer protection against legal malpractice so you might as well be a sole prop and get tax advantages. But don't LLC's turned into s-corps get the protection plus the same tax benefits?
     
  4. liftitbuddy

    liftitbuddy Newbie

    Joined:
    Aug 9, 2009
    Messages:
    18
    Likes Received:
    2
    Occupation:
    Attorney and CPA
    Location:
    Chicago
    Home Page:
    I am an attorney and CPA. While an LLC often would not protect against malpractice, are you in an industry which faces malpractice suits? In the internet marketing industry, "malpractice" is often not a concern. You should also be aware that an LLC wont protect from regulatory enforcement actions, such as FTC suits. However, there are tax benefits to S corps as you mention. Feel free to contact me to discuss further.

    --
    The information/answer is not, nor is it intended to be, legal advice. Consult an attorney regarding your individual situation. This attorney is only licensed to practice law in Illinois. Your question and this answer do not create an attorney-client relationship. Do not send/post any confidential information.
     
  5. boccas323

    boccas323 Newbie

    Joined:
    Jan 22, 2014
    Messages:
    25
    Likes Received:
    2
    Limitedly liable ... you will only lose what you have invested if you are busted/bankrupt... nothing personal will be taken.
     
  6. albimorkal

    albimorkal Jr. VIP Jr. VIP

    Joined:
    Mar 7, 2013
    Messages:
    732
    Likes Received:
    46
    Location:
    At Small Village
    I went with an llc... do sole proprietorship have better tax advantages than llcs? I had no idea. I was advice to go either with an llc or a s-corp. Also on the side note, llcs can be taxed as s-corps for lower taxes so that flexibility is why I went with llc
     
  7. Duffers5000

    Duffers5000 Elite Member

    Joined:
    Apr 1, 2012
    Messages:
    2,466
    Likes Received:
    7,615
    What protection are you after ?

    A limited company wont protect you if you are willfully breaking the law. It will however offer you personal protection in that the company is a seperate entity and you as a director are an employee of the company. If a partnership/sole trader gets into difficulty then he is personally responsible, ie you are chased personally for debt.

    If a limited company experiences difficulty you as a director can appoint a liquidator to wind the company up according to company law and hold a creditors meeting. The outcome of which will relate to the companies accounts and assets and not the directors.