The business end of Knife Making

G

Grizzly Bear

Well-Known Member
Good morning Knife Dogs.

They poured the foundation for my new shop yesterday and I am real excited. I have a lawyer
(daughter's father in law, lucky me) getting my tax number and setting up my corporation in the next couple of days.


This has got me thinking about things. Do most of you guys/gals form a corporation, a limited corporation, or a sole
proprietorship?

I know with a corporation that you can't personally be held responsible for things but the corporation is. Thus you
won't loose your home or 401K if there is a law suit. However, do you carry insurance to protect the corporation?

With everyone these days looking for any opportunity to sue people I was wondering if you are concerned about it.
"A guy cuts himself with a knife and sues you because the steel you used was too sharp." This example is kind of
far fetched but who knows?

I would appreciate any advice you could give me.

Thanks,

Grizzly Bear
 
I talked to a lawyer yesterday and he advised me to form a Limited Liability Company (LLC). He said to not buy insurance. If someone sues you big time file for bankruptcy and start all over again.

I hope this helps.

Grizzly Bear
 
I would question that advice. Starting over after bankruptcy is not as easy as this lawyer made it sound. Your credit is shot, your reputation suffers, and you're stuck with a HIGH interest rate on any credit you may need. I agree that a LLC is a great venue for a small, starting business...but I would still get insurance. I would describe my profession as a cutler, not a knife maker. Might make it easier to get insurance...
 
Smitty, would you mind giving me the name of a good insurance company and how much to get and how much it would cost? I know this is pretty personal, so if you don't want to answer, that's ok with me.

Thanks for your help.

Grizzly Bear
 
Grizzly, I didn't look for an insurance company, I looked for an agent. I got lucky and found a young agent just starting out. This guy worked his butt off looking for companies until he found a company. I have been with JM, General, and a couple of others whose name I have forgotten. I have had the same agent for the last 40 years (and he still does a great job).

When I closed my studio 3 years ago, I carried $100,000 liability with a $1,000,000.00 umbrella policy. IIRC, I paid about $1,800.00 per year at the end.
 
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Smitty,

Thanks for the info. I sent you a return private message. Hope you got it. It was the first time that I have tried to send one.

Grizzly Bear
 
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