If I choose to sell certificates for products or services that other companies will be providing, what business structure is necessary for this type of business?

UPDATED: Oct 1, 2014

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If I choose to sell certificates for products or services that other companies will be providing, what business structure is necessary for this type of business?

What liabilities might I face? What would people sue me for?

Asked on October 1, 2014 under Business Law, Illinois


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

There is no specific type of business structure which is "necessary"--it is always advisable, however, to run a business through an LLC (limited liability company) or corporation, to help protect you from any business-related debts or liabilities. (Of the two, an LLC is generally better for small business: it is more flexible and involves less paperwork.)

What could you be sued for? Potentially many things, such as:

1) If you don't have the right to sell certificates for the products or services of other companies, then the customers could sue you for fraud and/or breach of contract.

2) And if you don't have the permission of the other companies to sell certificates for their products or services, you could be sued by those companies for any of a number of things, such as unfair competition, trademark (or tradename or service mark) violation, or interference with economic advantage.

3) If you fail to deliver any thing you promise, that would be breach of contract.

4) If you cause injury to another person or business, you could be sued in tort for the damage or cost you cause; this could happen in many ways, ranging from physical damage (e.g. while driving somewhere for business, you hit another car or person) to reputational damage (you defame someone with something you say,. write, or post) to causing economic losses (you lose someone's account information and another person uses it to steal from the first person).

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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