California LLC, INC, or NOTHING 1

[LocalGuy]

I live in California. Do not own my own home, or have my own business. Recently I have been presented the opportunity to stamp grading plans for a friend who is designing and eventually selling a "Dream Green Home" near the beach.

I have consulted with him on the design, know it will work, and the only reason why I haven't stamped the plan up until now is because I don't have a contract, my own company, or insurance. I want to take the steps necessary to eventually become a self-employed professional and I have started researching LLCs, LLPs, and INCs. Everything seemed like it would be easy until I read thread784-92621. That thread ended with a post that claimed, in CA Professionally licensed engineers can not form an LLC or LLP to do engineering work, and that an S-corp. was basically worthless unless you carry a lot of insurance.

Now, I will probably go with nothing as I don't have a lot of clients or capital to start an s-corp.. I could start a LLC or a LLP if I was confident that it would protect me, but judging by what I have read in thread784-92621 Why Bother? Honestly.... I would really like to know!

Maybe if the walls they built and designed cave in, I will be able to see the sky!

 

[GregLamberson]

Marinov

I'm speaking in terms of design & construction services only. Here’s an idea, if there is a disaster or serious issue caused by a negligent design firm or a design individual and there is no professional liability or any other type insurance or assets in place by the firm/individual to provide remedy, what about going after the guy that advised them against insurance or normal business risk remedies?

He doesn’t have insurance or any assets either? No problem, let's press criminal and civil charges against the designer and his advisor so that at any point in the future should either party ever actually own or acquire anything of value, it would be forfeited. And what about also imposing a mandate that they are never allowed to bring a civil suit or seek any judgment against anyone for anything regardless of the circumstances? Seems fair.

I’m all for tort reform and against frivolous lawsuits, but there are many times when valid circumstances justify equitable compensation for a loss or damages.

You want to focus on the exceptions, not the rules? Try designing with the same mindset – design everything to the worst possible outcome (or best), the exceptions - see how much work you get.

I agree 100% to utilize contract terms & conditions to limit exposure to the maximum extent possible. But even then, my advice is simply not to do business with any entity (corporation or individual) that is either not bondable, cannot provide any letter of credit or guarantee, does not carry professional liability insurance, will not or can not provide any means of remedy.

If one is not willing or able to provide some substance, back up, and guarantee to their professional skills and work, my guess is the work product will reflect that attitude and I would choose not to utilize them - period. But that's just my opinion.


Greg Lamberson, BS, MBA
Consultant - Upstream Energy
Website:

http://www.oil-gas-consulting.com