Had a lawyer tell me small businesses should never form an LLC. Got me second guessing everything.

I was talking to a real estate lawyer at a networking event in Philly last Tuesday and she said most small businesses waste money on LLCs because they don't actually protect you from personal liability if you're running things day to day. She argued a solid insurance policy and a DBA does the same thing for way less. Do you guys think LLCs are overhyped for solo operators or is she way off base?

3 comments

3 Comments

hart.sage26d ago

Whoa, I gotta push back on that. That lawyer's take sounds wild to me. An LLC is a cheap shield for your personal assets, plain and simple. A DBA is just a fake name, it gives you zero protection if someone decides to sue you. Insurance is smart, but it doesn't cover everything, and it can drop you if a claim hits. Spend the few hundred bucks on an LLC and sleep better at night.

casey68225d ago

Five hundred bucks sounds like cheap insurance to me.

phoenix_grant3426d ago

A lawyer actually said a DBA gives the same protection as an LLC? That's shocking honestly. A DBA is just a piece of paper saying you're doing business under a different name, it doesn't separate you from your business at all. If someone sues you with just a DBA, they're coming after your house, your car, your savings, everything you own. Insurance is important but policies have exclusions and limits, and you can get dropped after one claim. An LLC costs what, a couple hundred bucks to set up and maybe a yearly fee depending on your state. That's cheap compared to losing everything in a lawsuit. I don't know what that lawyer was smoking but she's dead wrong about a DBA protecting you.