Selling electronics and lamps
I'm going to start selling some portable jam boxes that I make and some hand made lamps which I also make. These are probably considered electric appliances, they get plugged into standard household electrical current. My sales will be very low volume, probably less than $500 month. It's more like a hobby & side hustle. Should I form LLC primarily for protection against potential lawsuit(s) ?
25 comments
mam98031
·2 years agoPersonally IDK that it would be worth it to sell these items here. Seems you'd have pretty high liability for selling such a low amount of product. Insurance alone, if you could get it, is likely expensive.
reallynicestamps
·2 years agoDo you have Underwriter's Laboratory labels for your lamps? At least are all the electrical parts labelled?
Don't remove the labels.
Let the buyer do that.
spark-chaser1
·2 years agoAs a licensed, 30 year career electrician, I would highly suggest finding a different way to make money. I wouldn't dream of installing a non- UL. listed component in a job, let alone building a non- UL listed DEVICE and try to sell it to the general public. it is not a matter of IF but WHEN your product causes property damage or worse... If your first instinct was to come here and ask about liability... YOU ALREADY KNOW the answer.
downunder-61
·2 years agoThis ^^^^^
No idea on US laws, but here in Au we can not purchase any electrical appliance that does not have the sticker with the Australian Standard Electrical Authorisation code. Doubt your laws would be much different, and as you say, someone's house burns down (or worse) and it is traced back to an untested appliance sold by you.....................
djmann324
OP2 years agoThank you Spark Chaser1. Appreciate your honest feedback I am going to reevaluate.
spark-chaser1
·2 years agoThank you for seeing my advice for what it is. It is not personal, I just don't want to see you go down the wrong path. There have been times when I've seen electrical items that failed epically and cost lives, you don't want to walk into that minefield. If you can get through all of the legal hoops, then yeah- then you can start thinking about it.😉
Unfortunately, ( and many manufacturers have learned the hard way) when it comes to electrical safety, you cannot trust Joe Q. Public to safely use your device. And that's even if it IS listed... And any issues stemming from misuse will still be a potential lawsuit waiting to happen. Tobaccocardyahoo also brought up a good point about FCC signal interference regulations and licensing as well. I hadn't thought of that, but another thing to consider...
Just looking out for you. There is a lot to think about.
retro_entertainment_collectibles
·2 years agoSpot on.
ckimodog
·2 years ago@djmann324
If you feel they might present a problem or a lawsuit even, I probably wouldn't list them here.
Happy Holidays
hartungcards
·2 years agoShould I be concerned that one of your jam boxes or lamps will electrocute me? Your caution kind of frightens me.
djmann324
OP2 years agoI am confident my hand made products are safe but my confidence will not stop someone from suing me if they really want to, regardless of whether my product was faulty or not. If I was reselling shoes and t-shirts, I would not be concerned. The worst case scenario is someone comes back to me and says my product was faulty caused a fire and their house burned down. I want to make my personal assets are protected and its my understanding LLC is only way. I'll definitely check w lawyer. Thanks for responding!
susanb1872
·2 years agoSorry-left out a word from my previous post: Only a lawyer can give you the correct advice based on your own personal circumstances especially if you are concerned about potential lawsuits.
buyselljack2016
·2 years agoHi, I'm Karen, you owe me a million dollars because I burnt my finger on your lamp !!!!!!!
Check with a lawyer.
richard1rst
·2 years agoAnd since these presumably will not be UL listed (even in you use UL parts) it will be a slam dunk.
djmann324
OP2 years agoYou are correct, my hand made items will not be UL listed, though they will be built using UL listed parts. My concern is someone comes back to me and says they plugged in my product and their house burned down. I am confident my products are safe but my confidence won't necessarily stop some random person from suing me if they really want to, whether or not my product actually caused a fire. It is my assumption I should have LLC if I am going to sell these types of handmade products. If I was reselling shoes and hoodies I would not be concerned. I will definitely consult w lawyer but wanted to post here first. Thank you for responding.
djmann324
OP2 years agoYour Karen scenario is the exact situation I want to protect myself from. I'll be checking w lawyer. Thank you!
susanb1872
·2 years agoOnly a lawyer can you the correct advice based on your own personal circumstances especially if you are concerned about potential lawsuits.
mam98031
·2 years agoWhy is that? Selling as a Sole Proprietorship is a pretty normal thing. And if they feel the need to have some product insurance, they can still get that.
susanb1872
·2 years ago@mam98031 wrote Why is that? Selling as a Sole Proprietorship is a pretty normal thing. And if they feel the need to have some product insurance, they can still get that.
I stand by my answer. Yes- having a sole prop is very normal. A lawyer is the best person to discuss the pros/cons of an LLC or SP. We don't know the personal finances of this person or any other personal circumstances that could impact the selection. And we don't know if product insurance is the way to go if the OP has concerns about lawsuits.
djmann324
OP2 years agoAgreed, thank you!
mam98031
·2 years agoYou do not need to go through the expense of setting up an LLC. Just function as a Sole Proprietorship. That is what I've done all the years I've been selling on Ebay. It works just fine.
FYI on your lamps. They likely should be listed in Home Decor.
Why would you be expecting a lawsuit? If you feel this is a real risk, as a Sole Proprietorship you can still get insurance.
djmann324
OP2 years agoI need to protect myself in the event someone comes back to me and says they plugged in my product and it caused an electrical fire and their house burned down. I am confident my products are safe but that won't necessarily stop some random person from trying to sue me if they really want to, whether or not my product was faulty. I'll definitely check w lawyer but wanted to post here first. Thank you.
mam98031
·2 years agoI get it. That is where product insurance comes in. You don't have to be an LLC to have it, but if it makes you feel more secure, then it is what you should do.
djmann324
OP2 years agoThanks Mam89031 I have not looked closely at insurance yet but I will do that. Thanks for your reply.
djmann324
OP2 years agoIt's my understanding only LLC will protect my personal assets from potential lawsuit. If I was reselling shoes and clothing on ebay I would not be concerned. But I'll be selling handmade electronics. I want to make sure I'm protected in the event someone comes back to me and says they plugged in my product and it caused a fire and their house burned down. I'll definitely check w lawyer but wanted to post here first. Thank you for responding!
tobaccocardyahoo
·2 years ago