Limited Liability Company (LLC) Jurisdiction
The general public, and a fairly high percentage of small business owners, don't fully understand the jurisdiction of the protection provided by setting up a limited liability company.
The liability protection of an LLC is limited to the state in which the LLC is established. This is a routinely misunderstood issue. For example, a business establishes a Nevada LLC but the business is in California. The Nevada LLC provides no liability protection for the business in California.
“ Example – LLC Operating in Multiple States - Roy and Louis own a trucking company that is organized as a New York LLC. Their trucks also service customers in New Jersey and Connecticut. Their LLC status in New York affords them no protection in New Jersey or Connecticut. On the other hand, if they establish LLCs in both the other states, they would be protected in those states. ”
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