These Two People Should Form an LLC Too

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The conventional wisdom goes something like this: The reason that a small business should form an LLC is because it makes their business in to a legal human being. Once your business is an LLC, it can buy and sell, it can pay taxes, it can be sued, and it could sue. It can do everything that a biological human being can do. The business becomes not an extension of you but instead, it’s own entity.

With an LLC, if your business is sued, only your business can lose everything. Your assets are safe. Although some companies or individuals can be complicated, most of the time forming an LLC is simple and inexpensive. With the help of a business registration service, this process is easy and surprisingly cheap.

With that in mind, there are few other people or businesses that can benefit from an LLC.

Internet Retailers

All you’re doing is buying and selling stuffed animals on the Internet so there’s no reason that you would need to form an LLC. The idea that your business is too small to be a “real” business is dangerous. Any one of your products could cause harm to somebody and if that happens, even if you didn’t make the product, you could be sued. You’re never too small to be sued and if you haven’t registered your business, they’re coming after your family’s assets. If you take money, however small, to provide goods or services, you have to protect yourself and an LLC is the protection you need.

Armchair Investors

You don’t have to be in “the 1%” to consider this but if you’re investing a larger amount of money, forming an LLC around your investing activities can shield those assets from future litigation as well as have certain tax advantages in some situations. Expect to pay more than the basic rates in order to form an LLC for this purpose but protecting your assets is well worth the expense.


If you are your company, your assets are what attorneys will target in a lawsuit. If you form an LLC, they can only target your company’s assets providing you have kept all business assets separate from your personal assets. Remember to pay yourself a salary from your company bank account instead of depositing revenues directly in to your personal bank account (Compliance is an important part of maintaining your limited liability)

Regardless of how big or small, if you run any type of business you should register it as a business.