Question: I understand that if I form a limited liability company to operate my business and I am the only person who provides services on behalf of the business that I can be sued and be liable for my acts or omissions that cause harm to third parties. Instead of forming an LLC, can’t I just load up on insurance and not form an LLC to operate my business?
Answer: You could, but I think that would be a costly mistake. When you operate a business, commercial insurance is always your first line of defense. Your business should never operate without appropriate insurance coverage. Consult with several experienced business insurance agents and get their advice as to the type of insurance and the coverage amounts that are appropriate for your particular business. Always buy as much insurance as you can afford of the type that is appropriate for your specific type of business.
You operate a business through a limited liability company because it is your second line of defense against things that can go wrong with the business. What if you have insurance and the insurance coverage is denied? What if a plaintiff gets a judgment that exceeds the amount of insurance coverage? If you don’t form an LLC to operate your business and a plaintiff gets a judgment that exceeds the amount of your insurance coverage against you as the owner/defendant, all of your personal assets are at risk.
Fundamental Fact of Business Life: Without an LLC to operate your business, you are 100% liable for every thing that goes wrong. Do you really want to be in that position and have all of your life savings at risk? It’s hard to predict how liability may arise, but if you operate the business through an LLC, the general rule is the owners are not liable for the debts or obligations of the LLC. Wouldn’t you rather start from the position that you are not liable for anything (except your own acts and omissions) instead of the position that you are liable for everything?
Bottom Line: I believe it is foolish to operate an Arizona business without adequate insurance coverage and without operating the business through a limited liability company or a corporation.
Yes, I form Arizona limited liability companies. I’ve formed 6,700+ AZ LLCs. For the reasons why so many people hire me to form LLCs, see “Contents of Arizona LLC Attorney Richard Keyt’s Bronze, Silver & Gold LLC Formation Packages.”
KEYTLaw Girl Shows What Is In Every LLC Portfolio
When we form an Arizona LLC for $597 we don’t just send our clients a stack of papers. We put all of your LLC documents in a beautiful red Arizona Limited Liability Company portfolio with the documents organized behind tabs. Every LLC gets our custom drafted Articles of Organization, Organizational Resolutions signed by the members, the 50 page Charging Order Enhanced Operating Agreement, the 170 page Arizona LLC Operations Manual customized for the LLC, and a numbered membership certificate for each member.
We Answer LLC Formation Questions for Free
If you have questions about forming an Arizona LLC, contact Arizona LLC lawyers Richard Keyt (480-664-7478) or Richard C. Keyt (480-664-7472). We do not charge for entity formation related questions.
Two Easy Ways to Hire Richard Keyt to Form Your Arizona LLC for $397 (Bronze), $597 (Silver) or $997 (Gold)
To learn about what is included in each of our three LLC formation packages see our Bronze ($397), Silver ($597) & Gold ($997) LLC Formation Packages Comparison page.
We’ve made it very easy to hire Richard Keyt (6,700+ LLCs formed) and KEYTLaw, LLC, to form your new Arizona LLC. It’s a simple 5 – 10 minute process. To hire Richard to form your new LLC select one of the following two options:
Option 1 – Telephone
Call any of the following KEYTLaw people and give your LLC and credit card information over the phone:
- Richard Keyt – 480-664-7478
- Richard’s son LLC attorney & former CPA Richard C. Keyt – 480-664-7472
- KEYTLaw legal assistant Emily Conrad - 480-664-7846
Option 2: Online – Available 24/7