I didn’t mean to suggest that using a registered agent or business formation service would thwart litigation, just that it may add an extra layer of privacy. Personally, I would rather not have my name and address in public records associated with my companies, especially if I were in a business with a high likelihood of being sued.

Nickel’s post stated there is “no real reason” for using a business registration service, and I just wanted to point out why someone might want to do just that. For $25 + registered agent service ($99), I find it’s worth it.

In real estate it is common to open an LLC for each owned property for a single-asset LLC.

Using an LLC registration service as your statutory agent DOES allow you to “hide” your ownership/interest in the LLC from all but the most dedicated searchers. Doing this DOES NOT increase your protection from liability, however. Not separating your personal from your LLC finances, however, CAN potentially increase your liability via a claim that you are comingling and thus operating as a sole proprietor.

We’ve filed our own LLCs in the past, but I’m using an online service from now on. Why? To remain anonymous from prying eyes. Yes, this can be done by using a registered agent (which we do use), but there’s also a line on our State Articles of Incorporation for who is causing delivery.

If you’re worried about litigation (these LLCs are for our real estate investments), then you might want to consider using a business registration service.

If you go the LLC route and someone in this sue-happy country sues you, all that is at risk is your LLC and its assets. If you don’t, your personal assets could also be at risk. Don’t forget about possible attorney fees and other court costs. In the former LLC scenario, worst case you close shop. I fear the in the latter S.P. scenario it could be much uglier.

The other possible way to go if you want to remain sole proprietor is to get a personal liability umbrella policy, and probably other policies such as E&O to cover yourself. I thought about going this route but the complexity and expense steered me to an LLC.

It doesn’t take much income (or expenses) for that matter to make creating a business worthwhile. If you have costs associated with your website or business and if you do or plan on receiving income from it it may make sense to do so sooner than later.

The biggest reason is from a liability standpoint. There are clearly reasons to separate yourself from your business dealings.

One of the big advantages of creating something such as an LLC is that of accounting and taxes, which is where it may make sense to meet some sort of predetermined dollar threshold before creating one. But when you can completely separate your business transactions from your personal finances and then simply use a tax form to pass the taxable losses or gains to your personal income taxes, that is a nice benefit.

So I’d generally say if you are just starting something that is more or less a hobby and you’re testing the waters to see if it can become a business, it may not make sense to create an LLC or other business. But when you reach a point where you have a plan for your venture and realize it could work and have the intentions of making money from it you may consider setting one up.

Once I start trying to sell something then I will most likely register an LLC.