OfflineI'm in the process of starting a local online news service and am deciding to form an LLC or go the sole proprietorship route.
I'll be the sole operator of the business, reporter, editor, and ad rep, so I'm thinking it might be wise to have some legal protection, not only for matters of libel but also for handling any trouble on the business side.
My assets, at least at start up are minimal.I'm working from home on a refurbished computer.
So, what does anyone think? Is it worth the time and expense to start an LLC?
Print Me!
Yes, it is worth the time and expense to start an LLC, and the CMLP Legal Guide offers resources to help you through this process.
Although operating as a sole proprietor involves less up-front cost and hassle, there are some adverse liability consequences associated with sole proprietorships. For example, as a sole proprietor, you would be personally liable for all the debts and obligations to the business. If your website were to be sued for any reason--defamation, copyright infringement, or the like--you can be held personally liable and a winning plaintiff can collect against your personal assets, in addition to the business assets.
Establishing a limited liability company (LLC) still allows you to operate as the sole owner and contributor to the website, but offers limited liability for the debts and obligations of the company. Under some circumstances you could still be held personally liable for defamatory content written by you, but for the most part your personal assets would be off limits. Additionally, if you decided to allow independent contributors to post on the site in the future, liability for their unlawful actions would be limited to your investment in the company. This offers more flexibility than a sole proprietorship.
Forming an LLC does involve some up-front time and costs, but is not significantly burdensome. In addition to a filing fee, you will be required to file articles of organization with a state office. Creating and filing articles of organization for an LLC does not generally require assistance from a lawyer.
Please visit our Legal Guide for general information on forming an LLC, and more specific information about forming an LLC in Massachusetts.