Speaker 1: You don't need an LLC, you need a business. What do I mean by that? Stay tuned, we'll get right into it. Roll intro. Hi, my name is Jim Hart, I'm the founding attorney here at Hawthorne Law where we help online businesses just like yours get your legal house in order so that you can focus on what you do best and that is building a business that truly matters in the world. Today, I want to share with you three reasons why you do not need to form an LLC. So you're an online entrepreneur, maybe you're a blogger, a coach, a consultant, or maybe you're a teacher selling printables on Teachers Pay Teachers, or perhaps even you're the next best thing on YouTube. Whatever it is, you're running an online business and you want to make sure your business is legally protected. Listen, I get it, but let me ask you a question. Do you really need that protection? LLCs, also known as limited liability companies, are not free to set up. They're not just, the Secretary of State is just not out there handing these things out. You have to pay fees. You have to hire a registered agent in most cases. You're gonna need to have an operating agreement. You're gonna need to pay annual reports and annual filing fees. And that's just to maintain your LLC and make sure that it doesn't get shut down by your Secretary of State. Just last week, I talked to two clients, two clients, not one, two clients, both of which had had their LLC shut down because they failed to pay their annual reporting fees and they failed to maintain their LLCs. Listen, people, the main reason you set your LLC up in the first place is because you need that limited liability protection. And if you just ignore it and don't pay your fees and it gets shut down by the state, what type of protection is that giving you? I'll give you a hint, it's not much. So before you go out and hire my firm or someone else to set up your LLC, let's just stop for a second and make sure that you actually need one. I talk to a lot of clients on the phone and more often than not, I try and talk them out of forming an LLC as opposed to trying to sell them on why they need an LLC for their business. So here are three situations in which you probably do not need to form an LLC for your online business. Number one, you don't have any revenue. I'm amazed at how many people call me up and wanna do a legal strategy call with me and the first thing they wanna do is set up their LLC. And when I ask them, well, tell me about your business. How are you generating revenue? Their answer is, I don't really have any revenue. I'm just getting started and I think I need to start with an LLC. And I'm not even talking about they don't have a little revenue. I'm talking about they don't have any revenue at all. If you don't have any revenue at all, that means you don't have any clients, you don't have any customers. More than likely, you have very few people coming to your website. So that means nobody's gonna sue you. Nobody has a reason to sue you. You're not doing anything yet. And listen, I'm sorry if this sounds harsh. I'm not trying to be harsh, but I just don't wanna see you wasting your precious money and resources and capital on something that you just don't need right now, especially if you're not generating any revenue. So that's the first reason you don't need an LLC. The second reason you don't need an LLC is because you're not engaging in a high risk business venture. In other words, what I mean by that is whatever business you're in, the likelihood that somebody is going to sue you, even when you are doing well in business, is probably pretty small. So if you're a freelancer or a consultant, or like I said before, a teacher selling printables online, chances are you're not in a high risk type of business. The only reason you really would get sued is if you don't do the work that you're contracted for to do. And if that's the case, well, you've got bigger problems than whether or not you formed your LLC. Now, the third reason that you might not need an LLC is because you're what we in the legal world call judgment-proof. Judgment-proof means you don't have any money, you don't have any assets, you don't own a house, you probably have a car, because most people have a car, but you have very little money in your bank, you don't have any money in investment accounts, and maybe you're younger and you're just getting started and you just don't have any assets yet. And if that's the case, then there's really nothing to protect in the event that you do get sued. And like I said at the beginning of the video, the main reason to form an LLC is for the limited liability protection it provides, meaning that you're trying to protect your personal assets from the debts and obligations of the business. I realize this is not what you expected to hear from a lawyer, especially a business lawyer who sells LLCs. But honestly, I wanna see you succeed with your online business and not get bogged down with all the legal gobbledygook that's just going to keep you from focusing on what really matters and that's building your business. Did I just say legal gobbledygook? I'm pretty sure that's a technical term. But here's the thing, deciding whether or not to form an LLC for your online business is just one of the many, many legal issues that you're gonna need to grapple with for your online business. And coming up this Wednesday, yes, that's tomorrow, I'm gonna be hosting a live workshop to talk about a number of the things that you need to do to legally protect your online business without spending thousands of dollars on expensive lawyers or law firms. I'll put a link down below in the description if you'd like to learn more or even to register. Cool? Cool. I hope to see you Wednesday. In the meantime, here is another video that will teach you more about LLCs and everything that you need to do to protect your online business. I'll see you in the next video. Take care, folks.