I am an author, I have an LLC. The LLC has lost money since creation (09). How can I write, protect myself and not raise a red flag with IRS b/c it's not profitable. I just want to be protected. If I dissolve the LLC, can others sue me personally for material written while protected ? Thank you! Curious in Ohio
I'm assuming this is a single-member LLC; if you have multiple owners, dissolution gets a lot harder.
For an author, the LLC really does two things - it shields your individual assets from the financial outcomes of the business, and it serves as a vehicle to hold copyright to the things you write. But the shield from your business debts only really matters if you have debts, like loans or trade payables such as utilities, that aren't getting paid. If you're paying bills as they come due, then there's no reason for your creditors to come after you.
Other than those financial risks, I'm not sure what risk the LLC protects you from. If the material you write is signed, then you as the author (what the Europeans call the "moral rights" author, as opposed to the copyright-holder) would be potentially liable for libel. To put it another way, you can be sued personally for what you write, *now*, even with the LLC. If the LLC is the copyright-holder and licensor, so that it's making the money from what you write, you could have the LLC indemnify you - but if it's losing money, that may not be worth very much.
Contracts / Agreements Lawyer
My colleague above answered very eloquently.
Construction / Development Lawyer
Whether you will be liable for your writings after dissolution isn't really an issue. It seems odd that you could be writing something that people could sue you over, apparently under a claim that you gave them bad information.
Does the LLC have anything else? Equipment (computers, desks, etc), a lease, car, anything other than the rights to your writings? Does the LLC even have the rights to your writings or have you kept them for yourself? When you are wirting these things, do you have disclaimers?
Why do you want to dissolve the LLC? You really should, but most people don't. They just let them whither away. If you aren't going to dissolve it, it is probably best to keep your tax filings going, even if they show a loss. The downside is that the State may come after you years later for back taxes if you don't file. What "red flag" are you worried about? If you aren't profitable and haven't been during any year since 2009, you have already passed the threshhold on business losses. The IRS already considers your business a hobby so isn't giong to let you continue taking deductions for your losses. I have attached a link to an IRS discussion on Hobby losses. (I AM NOT A TAX LAWYER. TAKE THIS INFORMATION ONLY AS A DISCUSSION. IF YOU ARE CONCERNED ABOUT TAX CONSEQUENCES, CONSULT A TAX PROFESSIONAL)