Legal Question in Business Law in Arizona

Limited Liability

I am in the process of starting a new company for the sole purpose of importing, distributing and reselling an automatic voice alert automotive back-up warning device. Visit http://www.rkindustries.net/HindSight/ for details. With this in mind, I need a recommendation for the best corporate structure, whereby, in the event some legal action is taken as a result of an accident involving Hind~Sight, both my company and myself personally will be protected.

I'm concerned about the high probability there will ultimate be an accident involving Hind~Sight and I will be personally be liable. I am not comfortable risking my personal assets in this scenario. Although I consider Hind~Sight to be a superior product, the potential liabilities may outweigh the product merits and potential business success (profit $$).

I would like to discuss the merits of pursuing the product with the liabilities in mind and a recommendation for a corporate structure that will best fit the situation.


Asked on 9/13/05, 7:15 pm

1 Answer from Attorneys
Donald Scher Donald T. Scher & Associates, P.C.

Re: Limited Liability

A corporation or limited liability company limit your liability in a law suit to your interest in the corporation or company, so long as you have maintained the formality of the separate legal entity and acted solely on behalf of the legal entity. I believe a corporation will give you the greatest protection against suit, as well as tax benefits and other considerations which may arise as part of your exit strategy or succession plan. Protection of your personal assets is a separate question and should be considered as part of an overall strategy. Please seek professional help in determining which way to go and what to do.

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Answered on 9/14/05, 1:33 am


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