pen business poll

[Glenn McCullough]

OF THOSE WHO HAVE A "BUSINESS" SELLING PENS, ARE YOU A DBA, AN INDIVIDUAL PROPRIETOR, INTERNET ONLY OR BOTH?
IF OTHER , PLEASE EXPLAIN.

 

[ed4copies]

OK, I picked individual prop, but what is the difference between that and a DBA?

Think you wanted to ask LLC, or sub-s corp or reg corp or sole proprietor.

 

[jjenk02]

I agree with Ed[]

 

[Glenn McCullough]

My understanding is that a dba is You doing business as x woodworking and receiving all the profits as well as the liabilities....
as opposed to you owning a company, you are an employee of that business, receiving an income and the business receives all the profits that separates you and your personal assets from the companies debts and liabilities...
now, I am not all that well versed in the matter, I am just wondering the best way to proceed in starting my own business.

 

[ed4copies]

You have absolutely NO protection from lawsuit in a DBA. JIMGO, if this is only a state-by-state thing, say so.

To maximize your protection you need a corporation (a new legal identity), which costs a couple hundred bucks and a lawyer is not a bad investment.

I am NOT a lawyer, just been in business 35 years-my "real job" is a corp, our "hobbies" are "proprietorships". There is not a lot of liability in selling a pen.

Again, if JimGo differs-BELIEVE HIM!!!

 

[esheffield]

I think you may want to go back and rework or create another survey as this one is a bit confusing. The first two options are related how your business is recognized legally (also could be LLC, corp., partnership, etc). The third option is how you conduct your sales (might also be retail stores, wholesale, direct, consignment, etc.). Seem to be answers to two different questions. Might want to run separate surveys if you're wanting answers to both questions. HTH!

 

[JimGo]

Ed, I spouted off on that topic a while ago, before I passed the Virginia bar: http://www.penturners.org/forum/topic.asp?ARCHIVE=true&TOPIC_ID=4064

I agree with you; forming an LLC or other legally-recognized entity doesn't cost THAT much in government fees, and you can probably find a local lawyer who won't charge you an arm-and-a-leg to prepare the necessary documents and walk you through what you'll need to do to make sure you stay as protected as possible. Now, granted, for someone not doing a show, the liability risk may seem low (it's only a pen!), but there are several imaginable scenarios in which a pen maker like us could face at least several hundred dollars, if not tens of thousands of dollars in liability.

 

[jeff]

Glenn I think you're mixing your apples and oranges.

Seems like you're asking about business structure and sales method in the same poll. You might want to ask about them individually.

Maybe for the business: DBA, Sole Prop, Partnership, LLC, S-Corp, C-Corp.

For the sales method: Internet, Consignment, Own Shop, Combination, Other.

Am I missing your point? [?]

 

[ed4copies]

I just noticed I have more posts than the owner of the site.

I think I spend too much time here.[][][]

 

[Glenn McCullough]

Perhaps I made it too confusing and I apologize,I appreciate the opinins but I wanted input from those that earn an income from a business,paying taxes, not a hobby where income is not claimed. I also wanted an idea of how those people set up their business. Thought I had the correct verbage, perhapse scrapping this poll for a better stated goal would be best.
I am learning from this, though, that not everyone knows all the terms,including me, lol.

 

[DCBluesman]

Glenn - Rather than a poll, this might be a better discussion topic. While pens are more than a hobby for me, I do not make a living from them. When I first got started doing business, I was a sole proprietor DBA Heritage Pens. That let me take a load of tax deductions early on. (I say that like I've been at it a long time, but it's been less than two years.)

Over the past two years, I've made some changes. The first thing I did was join AAW, which gives me access to inexpensive insurance should I have an accident in my shop (like a fire).

Next, I extended the "business purpose" of one of my subchapter-S corporations to include pens. This didn't change a lot about my tax effect, but has led to increased costs. When done right, it can also put a bit of a shield between your business assets and your personal assets.

I don't pretend to be a lawyer or an expert on this, but Michigan has a lot of good information on their website at http://tinyurl.com/qpvqn .

Minor edit. Brain freeze.

 

[Rifleman1776]

Are you with the IRS? []

 

[ed4copies]

Take it from experience, its better to be WITH the IRS than AGAINST them.

(But it IS possible to win in the latter scenario, if you have a decade to spare!)

 

[emackrell]

Originally posted by JimGo
<br /> Now, granted, for someone not doing a show, the liability risk may seem low (it's only a pen!), but there are several imaginable scenarios in which a pen maker like us could face at least several hundred dollars, if not tens of thousands of dollars in liability.

JimGo, you have really piqued my curiosity with that remark. Now I am sitting here trying to imagine a few such scenarios, where the pen maker should be held liable, and I'm coming up short. Customer is allergic to the wood and gets a rash? Toddler sucks all the ink out? Cub Scout rubs the cap against the barrel, starts a fire and burns the house down? Customer uses pen to write a ransom note in a kidnaping? Irate wife stabs two-timing husband with the pen?

C'mon.... restore my faith in the American judicial system.....
Wouldn't there have to be some common-sense limit to how far the pen maker could be held liable if the customer does something stupid with the pen?

Cheers Eileen

 

[DCBluesman]

I'm not Jim, but there are a few cases that spring to mind. Ruined silk shirt - $150. Ruined Armani suit - $2,000. I wouldn't downplay the wood allergy thing either. ER visits can run $5,000 without blinking an eye. These, among other reasons, were enough to convince me to 1) incorporate, and 2) review my insurance policies.

 

[Glenn McCullough]

I just repaired a pen that "blew up " on a coworker, ruining his business suit. The pen was one of 100 I made that were ordered by a company (for top sales producers)that supplies mattresses to our company. The coworker asked me to repair the pen and did not ask for compensation, but could have I suppose.

 

[rpasto92]

Originally posted by DCBluesman
<br />I'm not Jim, but there are a few cases that spring to mind. Ruined silk shirt - $150. Ruined Armani suit - $2,000. I wouldn't downplay the wood allergy thing either. ER visits can run $5,000 without blinking an eye. These, among other reasons, were enough to convince me to 1) incorporate, and 2) review my insurance policies.

Unfortunatly you are probably right here. Now that I think about it I might just cut my losses now and quit selling pens. BTW - the reason the ER visit is 5K is the same reason we would be responsible for paying for it, a broken judicial system.

 

[chisel]

Originally posted by oobak
<br />I just repaired a pen that "blew up " on a coworker, ruining his business suit. The pen was one of 100 I made that were ordered by a company (for top sales producers)that supplies mattresses to our company. The coworker asked me to repair the pen and did not ask for compensation, but could have I suppose.

Sorry to hear that. We never want to have such things happen.

I believe you have some experience with legal matters, and I would like to ask for your opinion on a few questions.

Since we are using pen components made by other manufacturers, could we be held legally liable for other peoples’ faulty work? This assumes we made no mistakes in our handling of, assembly of, or shipping of said components.

Also, would some disclaimer about the inherent risks associated with fountain pens, or roller ball pens, be advisable?

BTW, what type of pen failed? Fountain, Roller Ball , or other?

Peace,

Chisel

 

[chisel]

Originally posted by DCBluesman
<br />I'm not Jim, but there are a few cases that spring to mind. Ruined silk shirt - $150. Ruined Armani suit - $2,000. I wouldn't downplay the wood allergy thing either. ER visits can run $5,000 without blinking an eye. These, among other reasons, were enough to convince me to 1) incorporate, and 2) review my insurance policies.

Wood Allergies????

That's the equivalent of suing The J.M. Smucker Company (maker of Jif peanut butter) because your child ate a PB&J sandwich and you found out he/she is allergic to peanut oils.

Not to mention that most of us seal our wood products with some finish, and no fine dust can be released.

OTOH, some people will try to sue others at the drop of a hat.

Peace,

Chisel

 

[PenWorks]

Most pen companies package a disclaimer on how to work a pen, be it a twist, click or FP. They also tell you that ink stains and they are not liable for damaged clothing.
That being said, had Glen included such a disclaimer, I still would make him pay for my damaged suit ! It has been said before and many times, if you sell pens, join the AAW and buy the insurance policy they offer thru an affiliate, the price is right.

DBA under an LLC

 

[Glenn McCullough]

Originally posted by chisel
<br />

Originally posted by oobak
<br />I just repaired a pen that "blew up " on a coworker, ruining his business suit. The pen was one of 100 I made that were ordered by a company (for top sales producers)that supplies mattresses to our company. The coworker asked me to repair the pen and did not ask for compensation, but could have I suppose.

Sorry to hear that. We never want to have such things happen.

I believe you have some experience with legal matters, and I would like to ask for your opinion on a few questions.

Since we are using pen components made by other manufacturers, could we be held legally liable for other peoples’ faulty work? This assumes we made no mistakes in our handling of, assembly of, or shipping of said components.

Also, would some disclaimer about the inherent risks associated with fountain pens, or roller ball pens, be advisable?

BTW, what type of pen failed? Fountain, Roller Ball , or other?

Peace,

Chisel

Chisel,
The only "experience" I have is being in a management position with a large retail company that many want free furniture from. I have been to many small claims, as well as faulty product claims hearings over 27 years. I can say that I know the complaintant can sue all parties, the retailer, the manufcturer and the parts supplier. In this case, I am the manufacturer, the faulty part is the slimline(tn coated of course)refill and the distributor is the bedding Co. that gave the pen away. Usually the retailer, or in this case, the bedding Co. would try to resolve it(to keep its good reputation), take the hit, and move on if it is a small settlement. In larger settlements, the retailer would collect some adjustment or future reductions from the manufacturer(me) who would seek the same from its supplier.
Glenn

 

[chisel]

<br />

Originally posted by chisel

I believe you have some experience with legal matters,

<br />

Originally posted by oobak


Chisel,
The only "experience" I have is being in a management position with a large retail company that many want free furniture from.

Sorry,

I might have had you confused with someone else.

Peace,

Chisel