Dark Horse Tavern » That customer is suing her for me

What Is Limited Liability and Why It Is Important? Business Articles | November 30 Avery Bradley Lakers Jersey , 2010





Limited liability is a way to make sure that a person who is engaging in business does not risk his or her personal possessions in case the business fails. In other words - you risk what you put in.






The best way to explain limited liability is this - you risk what you put in. ?In other words, limited liability is a way to make sure that a person who is engaging in business does not risk his or her personal possessions in case the business fails. ?Any investor, partner, or member of the company that by law has limited liability cannot be made responsible for any unfulfilled company obligations and debts that are more than the amount that the person has invested.?
Here is a simple comparison. ?Jack and Jill are friends. ?Jack is a handy guy and Jill is a great cook. ?To earn money from their talents, both start their own business. ?Jack earns his living by doing renovations. ?He bought his own equipment and simply advertises his services under his own name. ?Jack is a sole proprietor. ?
Jill decided to open a bakeshop. ?Before going into business Kyle Kuzma Lakers Jersey , however, Jill has formed a small corporation (an S-Corporation), called Jill's Cakes, Inc. ?Jill invested her savings into Jill's Cakes, Inc. as a starting capital and then bought her baking equipment and leased her shop on behalf of her corporation. ?So long as things go well for Jack and Jill there are almost no differences between the two ways of doing business. ?
As soon as things turn sour though Magic Johnson Lakers Jersey , the differences become apparent. ?One day, Jack mopped the floor right before leaving the apartment he just painted, but forgot to put up a sign. ?The owner walked in, slid on the wet floor and broke an ankle. ?He is suing Jack for medical expenses and lost wages. ?Jill accidentally dropped a peanut in a wrong batch of batter and caused a severe allergy attack in one of her customer. ?That customer is suing her for medical bills and pain and suffering. ?
What is at risk for Jack and Jill? ?Jack is risking everything he owns - his work equipment, his truck Kobe Bryant Lakers Jersey , his house, his personal belongings. ?So long as there is a judgment against him, Jack must sell anything he owns to pay it. ?Jill is risking only her business assets - her cooking equipment, her cash reserves, and anything else owned by Jill's Cakes LeBron James Lakers Jersey , Inc. ?But her personal things, such as her car and her apartment, are safe. ?Her business may become?bankrupt, but her life will not be destroyed. ?
Of course, this story describes a worst case scenario. ?Many businesses prosper without many troubles. But many also fail DeMarcus Cousins Lakers Jersey , and it is so easy for a business owner to take advantage of limited liability that everyone should do it. ?
Several types of business entities offer their owners the protection of limited liability. ?The most popular are corporation and limited liability company (LLC). ?Each of these entities has its own advantages and drawbacks, but both offer their owners limited liability protection. ?
A few things are important to remember in the context of limited liability. ?First, a company must be properly maintained in order to offer full liability protection that it is designed to offer. ?In short, if a company is only a company in name, but is run as if it is one and the same with the person running it Anthony Davis Lakers Jersey , the courts will consider it a sham, and will not afford the owners limited liability protection. ?
Second, even in a limited liability business an owner may be responsible for amounts beyond his or her investment. ?This is the case when an owner has personally co-signed a debt agreement (such as a credit card application). This signature gives the lenders a personal guarantee of repayment of that debt and in the case of default they can go after the owner's personal assets. Other owners of the company (or investors) would not be liable if complete repayment is beyond the resources of the business, but the owner who had done the co-signing would be responsible for that amount.

Further, in some professions it is impossible to reap the benefit of limited liability. ?Professionals like lawyers Avery Bradley Big Tall Jersey , doctors, accountants, chiropractors, engineers, or architects are prevented by law and ethics from limiting their liability. ?We want these professionals to be personally responsible for their decisions so that they always make the decisions carefully.?

The bottom line is Kyle Kuzma Big Tall Jersey , anyone doing business should consider taking advantage of a limited liability entity, if at all possible. ?Consider it an insurance against your worst case scenario.

This is the famous quip by Einstein often quoted in the literature. By itself, taken out of context it is difficult to see its meaning. Actually this line was a part of a letter written by Einstein to Max Born to express his dissatisfaction with Quantum Theory. Put in proper context it reads as follows:


?Quantum mechanics is very impressive. But an inner voice tells me that it is not yet the real thing. The theory produces a good deal but it hardly brings us closer to the secret of the Old One. I am at all events convinced that He does not play dice.?


The last three words (put in parentheses in the quote) were not there but implied in the context. ?Old One? was the nickname Einstein used for God. He disliked quantum theory for several reasons, one was its probabilistic nature. In any experiment with several possible outcomes the theory can give only the probability of any particular outcome; it cannot predict the outcome. When you throw a dice there is no way of telling what number it will come up with. All one can have is the probability of a certain number showing. Einstein on the other hand firmly believed that any correct and complete theory should be able to predict the outc. Cheap Air Max 95 Cheap Max Shoes Jordan Shoes For Sale Air Max Outlet Cheap Jerseys Wholesale NFL Jerseys Cheap NFL Jerseys Cheap Soccer Jerseys Free Shipping Cheap NBA Jerseys Wholesale Jerseys China