Liability protection

Liability protection

Postby ConnRiver » Mon Jan 11, 2016 11:11 am

Bernd wrote:
ConnRiver wrote:. . . Have you incorporated (S-corp, LLC?), have you gotten a tax ID? . . . -Brian C.


Nope, don't plan on being in retail, just manufacturing. Strictly hobby type operation. I think you can earn up to a certain amount. Have to ask my tax preparer what that number is. I'm not doing this to make money. My intended goal is just to get some product out there to see if we can get TT scale get back on to the model railroading scene. -Bernd


You're going to wholesale then (since your track jig will be sold somewhere)? This is an area in which I have not yet searched for information. I thought it might be "required" to lend some sort of liability protection to the manufacturer, however small.

RobM, Richard-B, anyone else have some basic information about manufacturer liability and protection even for the smallest of operations?

-Brian C.
Cedar Rapids, Iowa
Brian Chapman
Cedar Rapids, Iowa / USA
ConnRiver
 
Posts: 429
Joined: Tue Sep 15, 2009 10:51 am
Location: Cedar Rapids, Iowa / USA

Re: Track discussion

Postby Richard-B » Mon Jan 11, 2016 11:54 am

ConnRiver wrote:anyone else have some basic information about manufacturer liability and protection even for the smallest of operations?
Don't worry! <sic> This is the US;
EVERYBODY gets sued... the manufacturer, the distributor, the retailer, and even the user, if they were not the injured party.

Just had a side discussion about manufacturer indemnification with HP Inc.'s legal counsel at lunch on Saturday... it is a bag of worms! There is no avoiding risk exposure... hedging that is called 'insurance'.
Last edited by Richard-B on Mon Jan 11, 2016 2:39 pm, edited 1 time in total.
Richard Brennan - http://www.tt-west.com
Somewhere between San Francisco and Budapest...
User avatar
Richard-B
 
Posts: 921
Images: 1
Joined: Sun Oct 11, 2009 5:29 pm
Location: San Leandro, CA

Re: Track discussion

Postby areibel » Mon Jan 11, 2016 2:30 pm

Richard-B wrote:Just had a side discussion about manufacturer indemnification with HP's legal counsel at lunch on Saturday


HP? You're talking to HP Products? We're hearing it first here , folks! TT West is bringing back HP Products, the originators of TT!
(Sorry Richard, couldn't resist! :wave: )
areibel
 
Posts: 1750
Images: 7
Joined: Fri Jun 12, 2009 10:12 am
Location: Cambridge Springs PA

Re: Track discussion

Postby Richard-B » Mon Jan 11, 2016 2:48 pm

areibel wrote:HP?
HP Inc.
You're talking to HP Products?
Sorry... Madame X. was unable to channel through the time-space continuum during the séance!
Richard Brennan - http://www.tt-west.com
Somewhere between San Francisco and Budapest...
User avatar
Richard-B
 
Posts: 921
Images: 1
Joined: Sun Oct 11, 2009 5:29 pm
Location: San Leandro, CA

Re: Liability protection

Postby Bernd » Mon Jan 11, 2016 5:14 pm

ConnRiver wrote:You're going to wholesale then (since your track jig will be sold somewhere)? This is an area in which I have not yet searched for information. I thought it might be "required" to lend some sort of liability protection to the manufacturer, however small.


Would I need to form a S-corp or LLC if I sold them on E-bay?
I believe the limit of income that you need to show is if you make over $5,000 a year. Why would I need a tax number? Liability comes with anything you do or make for somebody else. If I fix the neighbors car and he has an accident killing somebody or himself I could be sued. No S-corp or LLC is going to save my hide on that. The only thing I'd be worried about is the IRS if I made $5,001.00. I can also get a DBA and get my hobby name trade registered. I get the feeling here you are a bit afraid of producing something.

Bernd
Image
User avatar
Bernd
 
Posts: 978
Images: 27
Joined: Wed Sep 02, 2015 8:43 am
Location: Rochester, New York

Re: Liability protection

Postby Richard-B » Mon Jan 11, 2016 6:04 pm

Bernd wrote:Would I need to form a S-corp or LLC if I sold them on E-bay?
These are state-level mechanisms for shielding liability.
I believe the limit of income that you need to show is if you make over $5,000 a year.
Again... this varies by jurisdiction
Why would I need a tax number?
Because if you are reporting revenue... you may not want it against your SSN.
Liability comes with anything you do or make for somebody else. If I fix the neighbors car and he has an accident killing somebody or himself I could be sued. No S-corp or LLC is going to save my hide on that.
That example may become an accusation of negligence... not product/commercial liability.
The only thing I'd be worried about is the IRS if I made $5,001.00. I can also get a DBA and get my hobby name trade registered.
First step is to read-up on state & local laws...!
Both tax law and corporate entity laws vary in all 50 states... and business regulations can vary down to the city level!
Richard Brennan - http://www.tt-west.com
Somewhere between San Francisco and Budapest...
User avatar
Richard-B
 
Posts: 921
Images: 1
Joined: Sun Oct 11, 2009 5:29 pm
Location: San Leandro, CA

Re: Liability protection

Postby Tom Dempsey » Mon Jan 11, 2016 6:14 pm

You also need to determine what is your percentage of liability when the product is used properly and improperly. I have a hard time seeing any significant risk involved as you are creating specialty products such as jigs. Once you decide to start selling more mainstream retail products such as flextrack, or car kits, or building kits...., well that's a different story. At any rate, I can't see any reason to go Subchapter S unless you anticipate annual gross sales in excess of $50,000 and LLC seems to me an unnecessary shielding mechanism at this point. Again, why protect yourself from a liability claim from experienced craftsman, the odds are extremely low, now if you decide to start selling products that would likely be purchased by less experienced modelers, there is more exposure. Of course, if you do what you can to limit the monkey's access to the pointy objects to the best of your ability, that will also limit your product liability level.
Tom Dempsey
 
Posts: 259
Images: 1
Joined: Sat Nov 20, 2010 9:08 pm

Re: Liability protection

Postby ConducTTor » Mon Jan 11, 2016 6:19 pm

I have no problem signing a waiver to buy a jig if that's what it takes. If I smash it against my head, I won't sue you.
What people think: "liberals/conservatives are ruining my country"
What the ruling class know: divide and conquer
User avatar
ConducTTor
Site Admin
 
Posts: 8598
Images: 13
Joined: Sat May 23, 2009 4:52 pm
Location: Atlanta GA USA

Re: Liability protection

Postby Richard-B » Mon Jan 11, 2016 6:55 pm

History has proven...
I have more to worry about from the Tax Trolls than the Lawyers... although I have well-funded both!
Richard Brennan - http://www.tt-west.com
Somewhere between San Francisco and Budapest...
User avatar
Richard-B
 
Posts: 921
Images: 1
Joined: Sun Oct 11, 2009 5:29 pm
Location: San Leandro, CA

Re: Liability protection

Postby richardedmonds » Mon Jan 11, 2016 7:09 pm

ConducTTor wrote:I have no problem signing a waiver to buy a jig if that's what it takes. If I smash it against my head, I won't sue you.


OMG although said in fun is all this the reason why most people and I include the UK in this are now scared to pick up a tool and make something for themselves. Will bananas soon be banned because the skins are slippery and what about spray painting your models without air filtration etc etc etc. We are all doomed are we not LOL
richardedmonds
 
Posts: 713
Joined: Sat Jun 13, 2009 12:08 pm
Location: London England

Next

Return to General Discussion

Who is online

Users browsing this forum: No registered users and 0 guests