LLC question

[Don Roley]

As some of you know, I just moved back from Japan and have started teaching for the first time.

On the advice of several people here, I am setting up an LLC. In Colorado it is very easy to get.

Here is a question about the limits of it.

If I go to a supermarket and the bag boy hits me from behind with a crowbar, I can take him to court for medical expenses, correct? I do not see why the supermarket should be sued for the personal actions of an employee even if he was on the clock.

So how does that differ from a case where I might injure a student in training? If two students are working out together and one injures himself, I can see how an LLC protects me. But if I, working as an employee of my own LLC do something I assume I am fully responsible for my actions.

Is there a problem with my logic or knowledge of legalities?

[DragonMind]

The answer, like many things in the law, is it depends. An LLC would protect you from personal liability provided the activity was normal and reasonable and performed with the proper safety equipment and supervision. That being said, your insurance is going to be what really protects you, not your corporate structure.

As for your examples, the standard would hinge around was the person in question acting within the scope of their employment. The stock boy clearly not but that still wouldn't necessarily absolve the store if he had a history of violence and the store knew about it but did nothing. As for you doing something, same deal. If you're demonstrating something and an accident happens that was despite reasonable care, you would not be personally liable. That doesn't mean the opposing attorney wouldn't try to make a case for you personally if you have deeper pockets than the LLC.

As always, consult an attorney. The money spent up front getting good advice is much cheaper than facing a trial later.

[Don Roley]

As for your examples, the standard would hinge around was the person in question acting within the scope of their employment.

How about this, what if someone was doing something as part of a business they set up?

Lets say that someone is doing something unethical and/or against the law. They do it as part of the business they own. I know of a case like this. If they put almost zero money into the actual business, are they safe from judgements against them?

It seems to me that if I set up a business that is geared toward something slimy I should be the target, not just the shell company I set up. I know some people that left a martial arts that can only be called a cult. As much as I would like to keep myself safe, I would like to see justice for them.

[DragonMind]

How about this, what if someone was doing something as part of a business they set up?

Lets say that someone is doing something unethical and/or against the law. They do it as part of the business they own. I know of a case like this. If they put almost zero money into the actual business, are they safe from judgements against them?

It seems to me that if I set up a business that is geared toward something slimy I should be the target, not just the shell company I set up. I know some people that left a martial arts that can only be called a cult. As much as I would like to keep myself safe, I would like to see justice for them.

Unfortunately, slimy isn't necessarily illegal and law is not about justice. Ethics and law are two different subjects. Liability is a legal subject and does not address ethics. Illegal activity can not be considered in the scope of employment so the corporate veil would likely be pierced to go after the individual. If the company condones illegal activity it also assumes the liability for that.

I can only speak in generalities because I am not an attorney and can't give legal advice.