Registering A Company — Do You Need To Register A Company? | TBS #110

The question is, can you afford not to register a company and put your personal assets at risk if shit hits the fan? Even if you aren’t required to register a company, I highly recommend you do so.

And I don’t mean a sole proprietorship.

What I’m talking about is an LLC or something similar. Something that separates the legal entity under which you’re operating from you as a private person. Only then will your company provide protection for your personal assets if someone sues you down the road.

Always think of the worst case scenario in business.

Let’s say you’re selling pacifiers on AliExpress, made out of cheap Chinese plastic. Everyone loves it and buys it, but nobody knows what’s really in that stuff because you have no control over it.

All those moms stick that cheap Chinese plastic garbage in their babies mouths. What if there’s something toxic in there?

What if a baby gets sick, intoxicated or even dies?

(Sorry for the brutal example, but as I said – think worst case!)

You as the seller of the good will be held accountable. The parents will sue you for millions of dollars and you’re pretty much screwed. If you’re operating as a private person, your life is over.

If you are operating as an LLC or legal entity then your private assets are protected if shit hits the fan. Worst case you can file bankruptcy.

So the question remains…

Do you need to register a company to do e-commerce? I don’t know. But should you? Yes. And if you do so, look at business structures that give you more protection such as LLC’s and so forth.

The bottom line is: Inform yourself about the available company structures in your company and get an expert or lawyer on board.