Every blogger should take a look at the post "12 Important U.S. Laws Every Blogger Should Know" on the Directory Aviva.  (Thanks to Liz Strauss for pointing out her "Great Find").  Overall, it is an excellent post and I wish the author was disclosed.  I particularly like the "How to Stay Out of Trouble" section of each post.  However, I have a few comments about No. 10 – Limited Liability Laws and Incorporating since that is one of my main areas of legal practice.

Here’s how the post says to stay out of trouble and my comments about each:

1.  Never mix your company funds and your personal funds if you want to preserve your limited liability protection

My response:  So true.  Business owners always need to make sure to keep their company funds and personal funds separate.  It is important to set up a company bank account and do not pay your personal bills and other personal expenses directly from your company account.  And you also need to watch personal guarantees which are often required of new business owners for loans and other expenditures.  You also should use your LLC or corporate name on all documentation and sign any documents using your name and title, i.e. "John Smith, Member or John Smith, President".  This helps make it clear you are acting in a company capacity as opposed to an individual capacity.  Also if you form an LLC or corporation for an existing business be sure to assign any contracts to the new business entity.  You will also want to follow your state corporate or LLC formalities along with drafting minutes of director, shareholder or member meetings.  Articles of interest on this site may include:

2. Always form an LLC rather than a corporation (Inc.) unless there are very specific reasons which apply to your unique case.

My response:  Small businesses may indeed benefit from forming an LLC because in general that form of business entity may have less formalties than the corporate form of business.  But it is important to realize that each business person may have different circumstances and therefore one entity may be better than the other for that individual.  I believe it is a bit of an overstatement to say that the formation of an LLC is the way to go for almost every single blogger.  In many instances, the S corporation form of business may be a better way to go.  Further, the decision does vary greatly on state laws.  Some states may not even allow single member LLCs.  Getting the advice of a small business lawyer and accountant is key in making the decision on which entity to form.  Articles of interest on this site may include:

3.  Consider the state you form your LLC in determines the law and to some degree the state taxes that apply to your company.  The vast majority of LLC’s are formed in Delaware or Nevada because of the strong legal entity caselaw in those states which tends to favor companies over individuals in lawsuits, but at a minimum creates a set of clear laws for companies to use if something goes wrong.

My response:  Many Iowa entrepreneurs have asked me where they should incorporate or form their LLC.  The question used to surprise me but given the number of advertisements on the Internet touting Delaware and Nevada corporations and LLCs, it is no longer a surprising question.  But in general, most small businesses will likely want to incorporate or form an LLC in their home state for a variety of reasons including convenience and cost savings.  Articles of interest on this site include:

Overall, I believe the Directoy Aviva post is helpful but I do recommend you get the advice of a business lawyer and accountant before you make a decision on which type of business entity to form and where to form it.  The article warned about the application of unique circumstances and those just might apply to you.  It is best to be fully informed before you move ahead.