3 ms·

I think the lesson is here it's all fine and dandy until someone does sue you. Then it's a different story.

_delirium 15y ago
If you're a 22-year-old with no assets it's probably not much different; you lose a judgment and declare bankruptcy and that's that. If you're older and have a lot of assets, you just do it via a corporation and it's the same, thanks to the magical unaccountability of the corporate veil.
- tptacek 15y ago
  IANAL, but signing contracts in bad faith may under some circumstances be tortious. Your corporate liability shield probably does not protect you from tort claims. You are shielded far more by your lack of meaningful assets. You aren't worth anything to sue. But there are clients, I promise you, who will turn out to be vindictive. Incidentally, if you're 22 years old, you should still have an LLC.
- veyron 15y ago
  Nowadays a lot of companies try to add clauses that pierce the corporate veil (for example, having personal guarantees)
  - learc83 15y ago
    For all kinds of things, like leases and such were the company is too young to have any credit. But a personal guarantee on delivering a website on time would be a bit much.
    - veyron 15y ago
      For longer projects, you should be asking for some sort of upfront payment (to avoid being screwed over -- i learned that the hard way). In that circumstance, companies may demand some sort of clawback if benchmarks aren't met.
- citricsquid 15y ago
  bankruptcy (at least here in England) means you're royally fucked, especially at 22.
  - _delirium 15y ago
    In the U.S. it depends somewhat; if you have a place to rent (e.g. know your landlord or it's via a friend) it's not a huge deal. You won't get a mortgage, and it'll make getting new credit cards or rentals from strangers harder, but not life-ending. Especially if you have a glamorous story behind it, like going bankrupt due to your tech startup being sued into oblivion...

If you're a 22-year-old with no assets it's probably not much different; you lose a judgment and declare bankruptcy and that's that. If you're older and have a lot of assets, you just do it via a corporation and it's the same, thanks to the magical unaccountability of the corporate veil.

tptacek 15y ago
IANAL, but signing contracts in bad faith may under some circumstances be tortious. Your corporate liability shield probably does not protect you from tort claims. You are shielded far more by your lack of meaningful assets. You aren't worth anything to sue. But there are clients, I promise you, who will turn out to be vindictive. Incidentally, if you're 22 years old, you should still have an LLC.
veyron 15y ago
Nowadays a lot of companies try to add clauses that pierce the corporate veil (for example, having personal guarantees)
- learc83 15y ago
  For all kinds of things, like leases and such were the company is too young to have any credit. But a personal guarantee on delivering a website on time would be a bit much.
  - veyron 15y ago
    For longer projects, you should be asking for some sort of upfront payment (to avoid being screwed over -- i learned that the hard way). In that circumstance, companies may demand some sort of clawback if benchmarks aren't met.
citricsquid 15y ago
bankruptcy (at least here in England) means you're royally fucked, especially at 22.
- _delirium 15y ago
  In the U.S. it depends somewhat; if you have a place to rent (e.g. know your landlord or it's via a friend) it's not a huge deal. You won't get a mortgage, and it'll make getting new credit cards or rentals from strangers harder, but not life-ending. Especially if you have a glamorous story behind it, like going bankrupt due to your tech startup being sued into oblivion...