question Domaining – LLC Protection?

[Domain2001]

I wanted to ask about and discuss the issue of LLC protection when domaining or flipping. Do the people here on this board operate as individuals, or as a business such as a single member LLC?

Specifically, I wanted to ask if an LLC would provide protection for a trademark dispute. I would never knowingly buy or sell a trademarked domain, but there is such a gray area it is sometimes hard to know whether a domain name is clear or not.

If someone sold a domain name that later resulted in a trademark infringement and a financial penalty against the seller, would the seller’s personal assets be protected if the seller was operating as an LLC?

Any information or feedback would be appreciated. Thanks.

 

[marm]

It all depends. IANAL, but my guess would be that yes, you would get additional liability protection by using an LLC - if you use the LLC correctly. By commingling funds in the same bank account, or doing activities that allow piercing the corporate veil, you would be basically just paying extra for the entity.

I personally use a New Mexico LLC for my online activities, as it provides strong anonymity and a basis for the separation of assets.

 

[Domain2001]

It all depends. IANAL, but my guess would be that yes, you would get additional liability protection by using an LLC - if you use the LLC correctly. By commingling funds in the same bank account, or doing activities that allow piercing the corporate veil, you would be basically just paying extra for the entity.

I personally use a New Mexico LLC for my online activities, as it provides strong anonymity and a basis for the separation of assets.

Thanks. I would definitely set up a separate business banking account.

 

[jberryhill]

If you believe it will provide personal liability protection from cybersquatting claims, the answer is "no".

The question is almost a copy of this one, stating, "The copyright issue falls somewhat in the gray area..."

https://www.avvo.com/legal-answers/will-an-llc-give-personal-legal-liability-protecti-2269432.html

 

[GeorgeK]

See Evan Brown's recent article on this issue:

https://evan.law/2024/04/01/can-the...-personally-liable-for-what-the-company-does/