Legal Question in Business Law in Minnesota

Re: Protection from liability

You would be wise to have a Written Agreement with this individual to establish limits and restrict your liability.

Call or email if you would like further input on this. In this situation a little prevention can save a ton of cure.

Re: Protection from liability

If you authorize them to conduct business under your companies name, then they are an agent of your company, and any contracts or agreements that they enter into your LLC is bound to. If they are sued, your LLC will be sued and all of your business assets are up for grabs to cover the suit.

Even if you make it clear to this person that they are not authorized to act as your agent, if it is reasonable for the third party to assume they are your agent (and because they are using your name on their business cards it would be reasonable) then you are still liable.

Finally, if you have not properly maintained the LLC and ensured that all business transactions and funds are kept separate from your private funds, if the LLC is sued there is always the possibility that the "Corporate Veil" will be pierced and you will be personally liable for any of this persons debts.

If you want to hire this person, or add them to the LLC, go right ahead, but I would vehemently advise against simply allowing them to use your name in the operation of their business.

www.SMSweeneyLaw.com