Being an Independent Business Owner certainly has its rewards, but it also has inherent risks. In fact, some risks can result in the kind of financial devastation that can never be overcome. And what's really disturbing is that many times the loss could have been avoided.
Any time you enter into an agreement with another person or company, and you don't have a properly registered legal entity between you and the other party, you are putting yourself at risk, particularly if your business is successful. For most people, a Limited Liability Corporation (LLC) is all that's really needed.
Though an LLC can put you in a more favorable tax position, its most significant aspect is protection from liability. Industry trends have revealed that some of the largest law suits filed against MLMs from the FTC include the MLM's leading DISTRIBUTORs, which should alert you to protect yourself, just as it has us. An LLC also minimizes risks that can arise from suits by other predators as well. The point being that you would be at near zero risk with the corporate veil protecting you and your assets.
Depending on how much distance you want between your personal assets and any potential predators, there are options that can remove your name from the entire package. For the maximum protection, most financial advisors recommend a Wyoming or Nevada company established with a Registered Agent. Shareholders are not public information in these States, and it has been fought and won at the Supreme Court, in Nevada's case. However, many believe Wyoming to be a better choice, for the following reasons:
- No state income taxes
- No information collected is shared with IRS
- Total privacy allowed
- Shareholders are not listed with the state
- Best asset protection laws
- Nominee officers are no longer needed
- Citizenship not required
- Wyoming draws less attention
- No Nevada "Stigma"
- Lower Startup Costs
We are neither attorneys nor accountants, so please be advised to seek your own counsel on any questionable areas involving matters of taxation, risk and liability.
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