Legal Question in Business Law in California

Whether you need a business license is a question for the city clerk or license office personnel to consider and answer based on local ordinances. My guess is that you do need a license. A business license protects you against fines for not having a business license, but otherwise has no protective effect. You should ask your insurance agent, especially if you are driving your personal automobile while going to and from borrowers' residences.

It is 99.99% sure you need a business license under the technical letter of the law in your location. It is 98.88% sure that with a business like yours you will never be asked for one or have any consequences from not having one. As for asset protection, forget about getting any from a license. A business license is nothing but a local tax on doing business. It has nothing to do with your assets. The only thing that would protect your assets would be incorporation or forming an LLC, both of which would be ridiculously expensive and troublesome compared with just carrying appropriate insurance.

I agree with the attorneys above. You will likely need a business license but to be certain, you need to contact the city and county in which you reside. Also, having a business license does not necessary protect your personal assets should your business get sued. A way to protect your personal assets is to create a corporation or an LLC but the tax and other expenses related to forming these business entities can be expensive. Unless you start making a lot of money in this venture, you should just purchase an insurance to cover any liabilities.

Also, you may want to make sure that your agreement with the Title Company is reviewed carefully, and make sure that this contains certain indemnity provisions to assist you in the cost of defending yourself if litigation occurs.

Jim Betinol

Partner

Withrow and Betinol Law

www.wibelaw.com

E: [email protected]

P: 424.229.2560

F: 424.258.7001

Disclaimer: This communication does not create an attorney-client relationship and such a relationship can only be formed through a signed written agreement. This communication is not legal advice and should not be solely relied upon in making your legal decisions. Any situation depends on many different facts and specific laws that require an in-depth legal consultation to evaluate the best solution for your needs.