Hello -

As is typical with free advice (family & friends) the responses aren't
coming quickly. Now my business cards are about to be printed and I'm
not sure if I'll need to add LLC or other to my business name &
president to my title (the driving force for my questions). I am
leaning towards staying as a SP while doing my business as Web
Designer and New Media (CD, DVDs, etc). FYI - I live in Colorado and
in 5 years I hope to be doing this with a nice stable of 5-10 sub
contractors still managing it out of my home or possibly a small
office. From what I can gather the pros and cons of incorporating
(assuming LLCs) are:

Pros: Limited liability, Separation of assets, Professional image and
acceptance by large companies, Law is settled on most issues.

Cons: Increased administrative costs, Taxation of single member LLCs
not clear to IRS (or has this been resolved?), Less overhead signing
paper work if you can just use your name and no suffix, Simpler and
cheaper banking(really like having my SSN as my id with Wells Fargo)

So, let me ask my top questions.

1 - If I do have an LLC, do I need to use the, LLC on everything like
business cards? I've heard you need to use it on *everything* (or it
could be considered personal)

2 - A few years ago I heard that some states had a flavor called LLCi
for individual. Does anyone one know if CO has such a thing and is it
still valid?

3 - If the goal is to protect my personal assets (hours, car, etc.),
what is wrong with get a good professional services insurance policy
(EO, or umbrella) to cover me while I am a sole proprietor?

3.5 - If I am developing web sites with sensitive info (say medical
advice) and/or hiring 3-4 sub contractors who may flub up at some
point can a good policy cover me and my assets?

Thanks so much. By the way, I am willing to pay for some good advice.
Totally willing to pass on a Amazon gift certificate or free web
advice to some good answers :)

Cheers!
Richard Price
Ascend Interactive

In article <f9r9j05bvr1kd1befbfkdkac3v64h50cqh@4ax.com>, 8900200
<explore65@yahoo.com> wrote:
3 - If the goal is to protect my personal assets (hours, car, etc.), what is wrong with get a good professional services insurance policy (EO, or umbrella) to cover me while I am a sole proprietor?

If you go the LLC route, your protection may be very small or
none at all. The reason is that anyone who is offering you work
or granting credit is going to want you to sign personally for
the LLC. They are not going to give up their ability to come
after you. Even if you do avoid signing personally, since you
are closely held (ie, no outside board of directors), a good
lawyer can likely punch through the LLC and get at you anyway.

If you go the insurance route, keep in mind that errors and
omissions insurance is very, very expensive. The best basic
liability insurance is an umbrella policy. Check with your
car insurance agent about that. This will protect you if
you burn down someone's building, but not if you cause loss of
revenue over a code bug.

The best way to protect yourself in cases of professional
screw-ups is to not take on the liability in the first place.
Get some legal help, and put a section in your contract that
says that you are doing fee for service work, and that you are
only doing a service, and not garanteeing an end result. You
want your worst case loss to be a loss of the hours that you
put in, or having to do a do-over, and not being responsible
for lost revenue or damage to a business due to your errors.

-john-

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John A. Weeks III 952-432-2708 john@johnweeks.com
Newave Communications http://www.johnweeks.com
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