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Re:My Encounter With a Patent Troll by chaostheory on Thursday May 24, 2012 @11:06AM (#4018750)
"That’s why it’s crucial to be legally protected with some kind of corporate structure. For most small businesses, this means creating a limited liability company."

Not all incorporations are made equal. For LLCs, I feel it depends on the state of incorporation as well as the number of members. I could be wrong, but an LLC that is either incorporated in states like CA or only has one member, can have its corporate veil easily pierced.

Re:My Encounter With a Patent Troll by spiredigital on Thursday May 24, 2012 @11:17AM (#4018810)
I'm not an expert on laws governing LLCs in different states, and I'm sure that there are loopholes / exceptions for certain circumstances. But being setup as an LLC vs. a sole proprietorship offers you significantly more protection. If you're targeted in a lawsuit operating as a sole proprietor, I believe all your personal assets are at risk. Operating under a LLC makes it significantly harder to come after your personal assets, especially if you're good about keeping business & personal assets in separate accounts.

Another thing I've heard recommended / try to do is to always sign as a member of a LLC (include your company position next to your signature) so it's clear you're signing on behalf of the LLC and not personally.

Re:My Encounter With a Patent Troll by chaostheory on Thursday May 24, 2012 @12:18PM (#4019121)
"But being setup as an LLC vs. a sole proprietorship offers you significantly more protection."

IANAL: I feel this depends on whether or not the LLC has two or more members. When an LLC has one member who is active, it's not much better than a sole proprietorship. Having great legal protection is a myth about single member LLCs that needs to be broken. It's relatively easy to pierce an LLC's corporate veil. Then again someone may prove me wrong. You need to talk to a lawyer.

Re:My Encounter With a Patent Troll by DenisM on Thursday May 24, 2012 @02:20PM (#4019752)
You are wrong. Source: http://www.amazon.com/Examples-Explanations-Corporations-Pri...

If you don't want to read the book, talk to a lawyer. Expensive lawyers have the first hour often (usually) free. My less expensive lawyer offered "one-hour consultation plus all filing fees" for $500 deal. That would be money well spent.

Re:My Encounter With a Patent Troll by chaostheory on Friday June 01, 2012 @03:06AM (#4052334)
Do you have the exact pages or passages proving that I'm wrong? I'm not saying that I'm not wrong, but I'm really curious to see the proof since I've been told time and again that it's relatively easy to pierce the corporate veil for LLCs in California.
Re:My Encounter With a Patent Troll by johnsto19 on Thursday May 24, 2012 @12:09PM (#4019073)
What is the recommended entity type for a small e-commerce business like the OP's business?
Re:My Encounter With a Patent Troll by chaostheory on Thursday May 24, 2012 @12:21PM (#4019134)
IANAL so this really depends on the person's specific situation i.e. like what state is the business in, how many members there are, and so on

imo if you want more protection, you need a C-Corp or a more than one member LLC... there are caveats to both routes and everyone should talk to a real lawyer about this or books from say NOLO

Re:My Encounter With a Patent Troll by spiredigital on Thursday May 24, 2012 @12:39PM (#4019221)
Can any lawyers, or those who have incorporated their own business as a C-Corp, provide a rough estimation of upfront and annual costs?
Re:My Encounter With a Patent Troll by DenisM on Thursday May 24, 2012 @02:11PM (#4019711)
I have an S-Corp, and the typical upfront cost with my lawyer is $500, that includes one hour consultation and all setup fees. Legal paperwork is under $100 and one hour per year. Accounting comes out to $900/year, but that usually pays for itself in all the deductions that my accountant can find.