Legal Question in Business Law in Texas

Sole Prop or LLC for Investment Advisor w/ small firm

I work as a sole prop with a very small Investment Firm that is not in my name (basically contract employee), I also have Error & Omissions Insurance with our Broker Dealer. I sell and provide invest. advice on college campuses. I am paid on commission only under my name. I am considering becoming an LLC to limit my liability if a client were to sue over an investment or car crash etc. Am I on the right track or does my E&O insurance cover me? From what I understand if I were a LLC they could only go after what I put into the business. If Im a Sole Prop, they could go after all that I have. Thank you very much for your help.


Asked on 10/19/05, 5:05 pm

2 Answers from Attorneys
Charles White Charles G. White

Re: Sole Prop or LLC for Investment Advisor w/ small firm

Ordinarily, a corporation or LLC will limit your liability to the extent of the assets of your company, particularly contractual obligations made in the name of the company (assuming there are no personal guarantees). Exceptions are torts which are committed by you personally, even though done in behalf of the company -- Excamples: You are the negligent driver in a car wreck; or, you personally misrepresent material facts in a deal made for the company.

Read more
Answered on 10/20/05, 10:16 am
Peter Bradie Bradie, Bradie & Bradie

Re: Sole Prop or LLC for Investment Advisor w/ small firm

You have the right idea. Find out if your E&O has a tail.

Read more
Answered on 10/19/05, 5:27 pm


Related Questions & Answers

More Business Law questions and answers in Texas