Corporate structure

[wlunday]

Mhutch69,

If there is negligence on the part of the agent, not just fraud, you can and most likely would be drawn into a lawsuit as an individual.

My attorney is quite up on these matters. He is one of only a few attorneys in Washington State admitted to practice before the U.S Supreme Court, so I think he knows his business.

In Washington, (I don't know about other states), if a person is personally negligent for a tort he cannot hide behind a corporate veil. Sure, if an employee does something wrong the corporate structure will protect the owner. But, we're talking about two people with start-up operation, and we are also talking about many more aspects than the legal liability issue. That is only one of the many things to consider when you go into business with a friend, and as a professional as well.

Let's ask MLight if he is only interested in the legal liability aspect, or the entire picture...

Swymmer

[gregcw]

Wlunday,

Sorry to disagree, but you are wrong. I own a 3 location, 27 employee agency. Prior to getting into the insurance business 30 years ago, I attended law school, before deciding that I preferred insurance. I am a CPCU, CIC, AAI, CLU. I tell you all of this to say that I didn't just fall of the apple cart. I've been around the block a few times, and know what I am talking about. I don't know where you get the idea that a corporation does not protect your personal assets. The way you word your reply, indicates that you strongly feel you are right. I suggest you discuss this with an attorney, as you are misinformed. However, I do not want to get into an online argument. Enough said.

jctwidad;

I have only the CIC and have only taken a quarter term of business law. My understanding has always been that the General and Premises liability exposures are shielded by incorporating, but that the professional liability exposure passes through the corporate shield.

Since I don't have a JD and although you didn't list it assume you may or at least were working on it, is this true?

Gregcw CIC

[etimer]

I think you better revisit the idea that the Corp Veil is hard to pierce.

Have you ever purchased anything with a Corp check that you can/do use for your personal? Ever miss the minutes to a meeting? Well your Corp Veil has / can be pierced. There are a myriad of ways a good attorney can / will pierce that corp veil.

First I would check to see what State laws are when it comes to joint ownership or personal property. In my State if you are married and property is jointly owned, it can't be attached. In my State you can't have wages garnished if you are paid outside of a salary arrangement.

If you feel the need I would go S Corp. From a regulation standpoint there is probably less hassles and less chance to get yourself in hot water.

There is another entity that comes under different names, is almost 100% bullet proof. The name I know is Unincorporated Business Organization. From what I've read, with the UBO, even if you lose the case in court, the only thing the person will receive is paper. You will then make that paper worthless. So they win nothing and many attorneys that understand a UBO won't even want to spend the time to file against you. At least that is what I've read.

But of course the UBO is the hidden way and people (including me) will usually take the familiar route. It is like trying to explain why Open Source has more value than the MS OS. Try finding an office that is running anyting outside of WORD and Windows.

I have to disagree, I think one is crazy to not incorporate. If a suit develops, as I understand it, it would be against the entity and if done correctly is really difficult to "pierce the corporate veil". I sleep better knowing my personal assets are separated from the business assets. You can still structure the corporation where the officers are compensated based on their production or efforts. I'm not seeing the logic behind the notion of "no need to incorporate". This is my opinion.