Answered by Tad Borek

Once you do business using a trade name (rather than your own name) you need to at least to a DBA filing. If nothing else, it's necessary for opening a checking account in the name of your business, and that's always one of the first things you should do when going into business for yourself. But a DBA has no liability protection associated with it, and for that you need an entity like a corporation or LLC. It's impossible to quickly answer the question of whether you should file an LLC and/or buy liability insurance for your business. Even seemingly low-risk businesses could have liabilities. Let's say you do work for someone and end up with their customers' data on your laptop - and your laptop is stolen by someone who is able to use that for ID theft or something similar. Or, someone sues you for infringing on their patent or using their business name. These examples may be non-issues but it's the kind of stuff that can be worth talking through with an attorney. An LLC can be cheap protection - though it can also be of limited value, depending exactly on what your possible risks are. -Tad

September 22 2011