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How to start a solo web business without getting sued (US)


#1

I have a couple of ideas for web apps SaaS businesses I’d like to start in 2015, but I’m not sure if I must have a registered business name for it to protect myself and my personal income from getting sued for whatever trivial reason.

Is there much risk involved in starting a saas business without registering all the LLC stuff around it first?

All the “fail fast” business startup articles I read talk about shipping asap, but I am not sure how liable I am in the short term as far as dealing with potential crazies that could destroy my personal finances with whatever unfounded legal fight. Especially if I am collecting payment via Paypal or similar.

Thanks.


#2

There is some useful discussion here: Business Insurance


#3

Nice, thank you. That’s perfect!

Looks like an LLC is a good start. The other E&D insurance sounds like a lot farther down the road.


#4

I think it is a good idea to have a company to separate your personal and business activities. And it gives you some legal protection. Its not difficult or expensive to start a company (in the UK anyway).


#5

Definitely is my plan.

I actually have an existing LLC and I probably should have started with my question, or link it to this as a new topic of:

If I already have a registered LLC for the above-stated asset protection, but I want to start out a new business SaaS product XYZ.biz , do I need to do a DBA or something to attribute XYZ.biz to that umbrella. I don’t know if XYZ.biz would be out there flapping in the wind also being liable for some personal assets.

I’m sure this is a common procedure I just can’t find the best solution to this situation.

Thanks again for the replies.


#6

Actually I may have found the solution I’m looking for here: http://smallbusiness.chron.com/organize-llc-parent-company-other-trade-names-40156.html

I’m usually leery about legal advice found through Google. But it seems legit in theory. :smile:


#7

I’ve also wondered whether there might be some kind of service where you could draw a salary and take payments through a parent company. So basically like a corporation as a service.


#8

Could that just be something an accountant creates for a business?


#9

@kalenjordan That sounds like a day job. :slight_smile: Kidding aside, it would be a great service to offer something that would do something like that but way more complicated than I could figure out.

@steve That’s a good question. I will ask and post a response.


#10

IIRC correctly a lot of IT contractors used to do this in the UK. I think it was called an ‘umbrella company’. But I could be totally wrong.


#11

Interesting. That sounds like exactly the name of an entity that would make perfect sense for this kind of thing :smile:


#12

That’s correct. I used to contract in the UK through an umbrella company because I didn’t think I would be doing it long enough to justify setting up a limited company. Accountancy firms provide the service for a monthly fee, though I haven’t heard of them being used outside of contracting. Generally it would be cheaper to setup a limited company.


#13

The fundamental problem here is not having to worry about getting sued. It’s that the US has become the most litigious country in the history of mankind. Whatever corporate structure you set up in the US can still be sued in countless greedy bullshit ways.

The real solution to your problem is moving somewhere else. I don’t mean to be flippant. The US is just not a good environment for (small) businesses anymore.

All the litigation is not even the only major problem. Think of the increasing “regulation”. Are you looking forward to dealing with ObamaCare? :sob: No? Well, what about whatever massive pain in the ass they come up with next?