Hey, creative. Let’s talk about another reason why you need an llc, a limited liability corporation. I published a, an episode on the tax advantages of a limited liability corporation for for business people, even freelancers. And I got a really good response and people asked me a lot of questions and, and we’re very interested in that. And so I thought I’d follow up with another episode talking about, um, some of the other advantages of limited liability corporations, LLCs, namely the limited liability. It’s right there in the name. Let me break that out for you and tell me, tell you why. That’s super important. Liability. What is liability? Liability is if I, Kevin Elliot, if I somehow am doing an activity and I damage someone’s property, or I damage or hurt that person, I am responsible for making it right? Typically what that means is that you go, they’re the lawyer, they’re gonna hire a lawyer, they’re gonna come to you, and they’re gonna want money. Okay? We’ve, we’re all familiar with this. If you get in a car wreck, you’ve been through this, you’re gonna fix my car. I have whiplash. Your insurance pays my, okay. Here’s the deal though. With a limited, there’s the word limited comes in.
Let’s say you are, you have a creative business or something. Say you are a musician and you are playing in a hotel one night, or you’re playing in a bar or a restaurant or something like that, and you bring, uh, your favorite amp into the building and you’re gonna play your show and you’re gonna do all the things. And your amp little, unbeknownst to you, has an electrical problem, and it sets the building on fire and it damages that hotel and someone gets hurt running away from the fire to get out of the building. If you do not have an, an llc, a limited liability corporation, you the individual, are responsible for every one of those damages to that person, to that building, everything. And that means lawyers can come after your personal property, your house, your car, your bank accounts, everything you own. You have unlimited liability.
If you have an llc, think of it like this. With an llc, you are, it’s like creating a whole other human being. Another, a whole other person. This person is gonna have a name, whatever you name, your llc, it’s gonna have a, uh, like basically a social security number. They, it’s like, it’s called an e i n number, an, uh, an employee identification number. But it’s like a, it’s like its own social security number. It has its own bank accounts. It has its own tax returns, it has its own property. This entity, the LLC can own property gear, buildings, cars, cell phones, whatever it is, whatever it needs to do that business, it owns those things. So like our gear at We Wall films, those cameras we buy, we all films. LLC owns like 75 grand worth of camera equipment. I don’t own it. Kevin, uh, Courtney doesn’t own it.
Weal Films, LLC owns it. And here’s why. That’s huge. If you have an llc, and let’s use our musician example. You go in, the fire happens and the lawyers call you, well, that amp, the Faulty Amp, was owned by your business llc, and that means your liability is limited to only the assets of that company. So the lawyers can come and they can take all the money the business has in the bank account and all the gear that the business has, but they can’t come after your personal home, your personal property, your personal bank account, or those of your family members. And will they do that? Yes, they will do that. It happens every single day. A limited liability corporation puts the liability on that person. You’ve created that, that company, that llc, that entity, and that entity takes the responsibility. It limits your liability, llc, that’s huge.
You think mistakes can’t happen, but they can happen. What if I’m shooting a video one day, we have a ladder to get up high, I drop the ladder, it breaks a window, the the glass shatters goes into someone’s eye and it blinds them. What happens? I Kevin don’t want to have to be responsible for that. We all films might be, but it limits my personal liability. It separates, it puts a fence around your business. More importantly, it puts a fence around your own personal stuff. And courts uphold LLCs. They are very strong about doing this. Let me give you a couple books I mentioned to you in the other episode. Rich Dad, poor Dad, I wanna mention it again because it’s just that good, rich Dad, poor Dad will set up the whole philosophy, teach you how to think like a business person, teach you how to think, uh, uh, like an llc, what the LLC does or the corporation does, and how the money moves through it, how it’ll save you on taxes.
And then a follow up book by Garrett Sutton, s u t t o n. You see, it’s the same purple as the Rich Dad. He’s a Rich Dad advisor. This book is called Start Your Own Corporation, because there are other kinds of corporations besides LLCs. There are S-Corps and C-Corp and all this. Don’t worry about that. Don’t get overwhelmed. Start with an llc. Even if you’re one person with a tiny operation, do not open yourself up to that kind of liability and risk. This is well worth doing. It’s gonna save you money, it’s gonna help you sleep better at night. It’s just a good thing to do. So get out there, get the llc. I’ll probably follow up with another episode on some of the steps on how to get one, but it’s easier than you might think. Okay? You can do this. Protect yourself, protect your business. I love you.