Q: Do I need to be a LLC or similar? As an independent contractor Process Server I want to protect myself, home, car etc.?
I use my own car and am paid 1099 in my own name. In case of an issue during the serve or an auto accident while working I want to protect my family, house, cars etc from litigation/responsibility.
A: As an Indiana attorney, I'm not familiar with Illinois rules governing process servers, so I can't tell you if there are any specific provisions of those rules that might affect the answer to your question. But I can answer your question as a general matter.
As long as the LLC is properly organized and operated, the owners of a limited liability company are not responsible for the LLC's debts or obligations, which means the assets of the owners cannot be reached by the LLC's creditors. Even so, doing business as an LLC (or corporation for that matter) does not protect the owner from liability for his or her own actions, and it does not shield the owner's assets from his or her own creditors.
Let's say, for example, the employee of a limited liability company, while conducting LLC business, causes a traffic accident. The employee will be liable because he or she is the one who caused the accident, and the LLC will be liable as the employer of the person who caused the accident. However, the owners of the LLC will not be personally liable, and someone injured in the accident will not be able to reach the owner's personal assets.
Now change the facts a bit so that it is not an employee who causes the traffic accident but rather the owner of the LLC. Just like the employee in the previous hypothetical, the owner will be liable because he or she is the person who actually caused the accident. The fact that he or or she was conducting LLC business at the time does not change that. So the answer is that setting up an LLC for your process serving business will not protect you from the sort of liability you're asking about.
That said, I don't want to discourage you from considering an LLC because it can furnish protection against other types of liability. For example, the company's trade creditors (i.e., people or companies that sell goods or services to the LLC) cannot reach the assets of the owner unless the owner assumes the LLC's liability, for example by signing a personal guarantee.
Nonetheless, a limited liability company really doesn't give you the type of protection you're looking for. For that, the best you can do is to buy a good liability insurance policy.
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