Hello,
A partner and myself are in the process of starting a business selling educational furniture and we are situated in MA. The fees to form a LLC here are high, so I am not sure what is the best for us. What do you folks think our liability is with our products? Instead of forming a LLC, can we instead get liability insurance? Also, do I absolutely need a lawyer? Or are those "do it yourself" business documents kits/software (they have them at Staples) any good?

Thanks a lot

You could get liability insurance, but if you are sued for more than your insurance, you would be personally liable if you aren't incorporated or haven't formed an LLC. Your products may not be "high risk", but considering what some people have sued for (McDonald's hot coffee comes to mind) and win, if you can afford it, it's better to be safe than sorry.

If you're small enough, you don't need a lawyer. I did use an online service, though, to form my LLC. My opinion is that incorporating isn't the best option because of the double taxation you'll face (you won't be able to file your partnership tax return as a corporation). If you're large and considering an IPO, that's a different story.

Research the differences between LLC and corporations for your state. Alot of good information here http://www.bizfilings.com/

Thanks for the info and site. I will check it out.

Insurance man and lawyer told me it's all about exposure. If you are sued, often a good lawyer can break through that and get to you anyhow.

Check into a umbrella policy with your insurance agent which will give you a total "umbrella" policy and put it at the level needed. A former business of mine I had 5 stores and about 26 employee's and I think I had 2 mil. I had delivery drivers etc. I was concerned they'd run over a soon to be lawyer kid and be sued through my nose.

Dave

Good advice. Can never be too careful.