Ask the cubicle expat: LLC vs. sole proprietor?

August 27th, 2008

Amy writes: I have a small boarding facility on my property. I board eight horses and I also live on the premises. I am trying to decide if I need to become an LLC. My concerns: If something does happen to a horse on my property due to my negligence, I don’t want to lose my house/land. What is the best way for me to go about this? I have spoken to my insurance agent and I am working on getting a policy in place to cover the liability, including an umbrella.

I answer: I’m no lawyer, but I would think an LLC would be a good idea since you’re dealing with people’s animals. As a I understand it, an LLC offers more protection than simply purchasing liability insurance. Here’s an earlier post I wrote on LLCs. And here’s a whole page on LLCs on Nolo.com that can tell you more. I suggest talking to other boarders to see what legal structure they’ve set up — as well as a qualified legal professional to get their recommendations.

Good for you for getting the liability insurance though. Hopefully you got business liability insurance and not a personal liability plan. (More on that here.)

Entry Filed under: Ask the Cubicle Expat, She's the boss