When starting an e-commerce retailer business, is it better to obtain an LLC with/without more than one member?

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When starting an e-commerce retailer business, is it better to obtain an LLC with/without more than one member?

I’m starting up a business to sell products on Amazon. I know I want to get an
LLC and EIN, but I’m not sure if it’d be best to just name myself on the LLC or
to include my husband as well. I’m thinking in terms of both liability, as well
as, taxes. Thank you in advance.

Asked on July 17, 2019 under Business Law, Texas

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 1 year ago | Contributor

For the tax impact, we will defer to an accountant: you should discuss *your* exact situation (what sources of income you and your husband have and how much you each make; potential deductions) to understand what is best for the two of you from a tax perspective. 
From a legal liability perspective, as a couple, you will enjoy greater protection if you do not include him as a member (owner) of the LLC. The reason is, while LLC members are generally not liable for the debts or obligations, including judgments (from lawsuits), or or against their LLCs (that's the whole point of a "limited liabilty company," or LLC, after all; to limit the potential liability of the owner(s)), there are some rare occasions where the "corporate veil," or protection of the LLC, can be pierced and owners held liable for what the company does or owes. While this is, as stated, rare and thus unlikely, it's not impossible, so if your husband is part of the LLC, in that event, both of you could be liable. But if he is not a member, any separate property or assets of his would not reachable by those suing or owed money by the LLC.


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