I know if you don't sell over a certain amount a year it is considered a hobby and a license is not need for sales tax. I Virginia you can used your ssn but to get a LLC will limit your liablity if you get a vendictive customer. Just like the lady who sued for the hot coffee that did not have the word hot on the cup.
In the first place, having an LLC does not magically bestow limited liability on you for your business activities. If you want legal advice, take it from an attorney instead of from a web forum. In the second place, the McDonalds thing is often used as an example, and almost always used incorrectly. Here, for your reading pleasure, are some of the actual facts. This cut-and-paste is taken from an on-line legal news archive, but you can goggle it and find your own verification.
There is a lot of hype about the McDonalds' scalding coffee case. No
one is in favor of frivolous cases of outlandish results; however, it is
important to understand some points that were not reported in most of
the stories about the case. McDonalds coffee was not only hot, it was
scalding -- capable of almost instantaneous destruction of skin, flesh
and muscle. Here's the whole story.
Stella Liebeck of Albuquerque, New Mexico, was in the passenger seat of
her grandson's car when she was severely burned by McDonalds' coffee in
February 1992. Liebeck, 79 at the time, ordered coffee that was served
in a styrofoam cup at the drivethrough window of a local McDonalds.
After receiving the order, the grandson pulled his car forward and
stopped momentarily so that Liebeck could add cream and sugar to her
coffee. (Critics of civil justice, who have pounced on this case, often
charge that Liebeck was driving the car or that the vehicle was in
motion when she spilled the coffee; neither is true.) Liebeck placed
the cup between her knees and attempted to remove the plastic lid from
the cup. As she removed the lid, the entire contents of the cup spilled
into her lap.
The sweatpants Liebeck was wearing absorbed the coffee and held it next
to her skin. A vascular
surgeon determined that Liebeck suffered full
thickness burns (or third-degree burns) over 6 percent of her body,
including her inner thighs, perineum, buttocks, and genital and groin
areas. She was hospitalized for eight days, during which time she
underwent skin grafting. Liebeck, who also underwent debridement
treatments, sought to settle her claim for $20,000, but
McDonalds
refused.
During discovery, McDonalds produced documents showing more than 700
claims by people burned by its coffee between 1982 and 1992. Some claims
involved third-degree burns substantially similar to Liebecks. This
history documented McDonalds' knowledge about the extent and nature of
this hazard.
McDonalds also said during discovery that, based on a consultants
advice, it held its coffee at between 180 and 190 degrees fahrenheit to
maintain optimum
taste. He admitted that he had not evaluated the
safety ramifications at this temperature. Other establishments sell
coffee at substantially lower temperatures, and coffee served at home is
generally 135 to 140 degrees.
Further, McDonalds' quality assurance manager testified that the company
actively enforces a requirement that coffee be held in the pot at 185
degrees, plus or minus five degrees. He also testified that a burn
hazard exists with any food substance served at 140 degrees or above,
and that McDonalds coffee, at the temperature at which it was poured
into styrofoam cups, was not fit for consumption because it would burn
the mouth and throat. The quality assurance manager admitted that burns
would occur, but testified that McDonalds had no intention of reducing
the "holding temperature" of its coffee.
Plaintiffs' expert, a scholar in thermodynamics applied to human skin
burns, testified that liquids, at 180 degrees, will cause a full
thickness burn to human skin in two to seven seconds. Other testimony
showed that as the temperature decreases toward 155 degrees, the extent
of the burn relative to that temperature decreases exponentially. Thus,
if Liebeck's spill had involved coffee at 155 degrees, the liquid would
have cooled and given her time to avoid a serious burn.
McDonalds asserted that customers buy coffee on their way to work or
home, intending to consume it there. However, the companys own research
showed that customers intend to consume the coffee immediately while
driving.
McDonalds also argued that consumers know coffee is hot and that its
customers want it that way. The company admitted its customers were
unaware that they could suffer thirddegree burns from the coffee and
that a statement on the side of the cup was not a "warning" but a
"reminder" since the location of the writing would not warn customers of
the hazard.
The jury awarded Liebeck $200,000 in compensatory damages. This amount
was reduced to $160,000 because the jury found Liebeck 20 percent at
fault in the spill. The jury also awarded Liebeck $2.7 million in
punitive damages, which equals about two days of McDonalds' coffee
sales.
Post-verdict investigation found that the temperature of coffee at the
local
Albuquerque McDonalds had dropped to 158 degrees fahrenheit.
The trial court subsequently reduced the punitive award to $480,000 --
or three times compensatory damages -- even though the judge called
McDonalds' conduct reckless, callous and willful.
No one will ever know the final ending to this case.
The parties eventually entered into a secret
settlement which has never
been revealed to the public, despite the fact that this was a public
case, litigated in public and subjected to extensive media reporting.
Such secret
settlements, after public trials, should not be condoned.
