Legal Question in Business Law in Rhode Island

Re: limited corporation or s corporation

Your business would not have stock UNLESS it was a corporation.

It appears that you operate a sole proprietorship, which would

leave you personally liable for your actions and the acts or

ommissions of the subcontractors (your agents).

The corporate entity is well understood in all

jurisdictions and there is a well-established body

of law relating to corporations. The LLC is a

relatively new concept that, in some ways, has

more flexibility than a coporation, but it does

not have the well established body of law mentioned

above. For that reason, depending on the type of

business involved, I often find a corporation

preferable to an LLC.

Either entity would shield your personal assets

from the acts/omissions of the agents, but it would

not necessarily shield your company assets from

those risks.

In any event, you should have adequate business

insurance and very carefully drafted agreements

with your subcontractors that require them to

carry insurance and to indemnify you if a customer

has a claim or files suit against you or both you

and the subcontractor.

I hope this information is helpful. Feel free to

contact me at 401-885-7200 if I can be of further

assistance.

Best of luck in your business.