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Should I get LLC?

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lyricsonwings

Junior Member
Hi. I need a simple legal expertise and advice. I'm planning on making and selling handmade leather watch straps. It will probably be more for a hobby than business, since I don't have a whole lof time to mass produce anything. Custom straps have been a passion of mine for some time, and I always enjoyed making them when I have the time. I plan selling a few on line, through various websites, such as eBay or etsy.com that cater to handmade goods.

However, I imagine that there might be some legal implications; in rare cases, the strap might actually break and end up damaging a very expensive watch. Let say a $20,000 Rolex. This is a worst case scenario, of course, and some might even consider it paranoia. But it is not entirely imposible to overlook a piece of leather that is brittle or defective before it is made into a stap.

In either case, should one even bother with getting a business license, insurance and obtaining a LLC certificate? Filing for LLC here in California is $800 per year I was told. This is very expensive, considering my profit might be very little. I'm wondering if it's worth the time and money for small scale operations.

Bottom line is--can someone sue me for selling a watch strap on eBay--if somehow it ends up damaging their watch?

Thank you so much!

What is the name of your state (only U.S. law)?What is the name of your state (only U.S. law)?
 


Mass_Shyster

Senior Member
in rare cases, the strap might actually break and end up damaging a very expensive watch. Let say a $20,000 Rolex. This is a worst case scenario, of course, and some might even consider it paranoia.
I have a worse scenario. Let's say someone gets your watch strap caught in a machine and his arm is severely injured (google degloving). He sues everyone in sight, including you.

Bottom line is--can someone sue me for selling a watch strap on eBay--if somehow it ends up damaging their watch?
Sure, they can. They can name you and the LLC for the (alleged) defective product.

In this case, where you, personally, are designing and manufacturing the product, both you and the LLC can be named in a lawsuit. If, however, the LLC is buying watch bands from China and re-selling them, you (personally) would be protected by a properly structured LLC.

You should also look into product liability insurance.
 

tranquility

Senior Member
A LLC offers some liability protection but not as good as, say, an S corp.
The degree of limited liability is the same. Heck, an LLC (in some states) only allows limited remedies like a charging order so some might argue an LLC is better than an S-corp.

Or have insurance.
Any real business should have three basic liability protections.
1. Business entity
2. Insurance
3. Business practice (waivers, training, etc.)
 

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