Help with Some Legal Stuff Getting Started

[squeed]

I'm trying to get set up with a general agency who I can sell my policies through. I've gone through the state and set up an LLC to do business through vs. just myself. I have a tax ID # from the IRS.

The general agency is telling me that they need the following :

My license (OK, I get it)
My E&O insurance (OK, I get it)
A license for my LLC (Huh ?)
My SS# (Why if I have a tax ID#?)

I set up the LLC so that I'm not doing business as "Joe the insurance agent" but why is he asking for a license for my LLC and my SS# if I have a tax ID# ?

-S

 

[Mr_Ed]

Squeed,

In most states, any entity that "sells insurance" needs to be licensed.

If you want your LLC to "sell insurance" then it has to have an insurance license.

Additionally, the business entity (LLC in this case) has to have a licensed agent as the one who is responsible for the "actions of the LLC".

Lastly, they'll need your SS# because you're the one who is writing the business and responsible for the LLC.

What are you hoping to accomplish by running everything through the LLC?

 

[squeed]

Will I suffice as the licensed insurance agent for the LLC ? I do have a state license for life insurance which is the only insurance that I plan to sell right now.

How do you go about licensing your LLC ? My assumption is that it is just another fee to the state ?

I'm very sensitive about providing my SS# because I use to work in the identity theft industry and you would be surprised at the stories that I've heard. Is this going to be mandatory no matter what general agency I use ?

What I am hoping to accomplish with the LLC is:

* Protect myself in the event of an issue. I'll have E&O insurance but I don't need someone taking my house if they sue me. So I want them to be doing business with the LLC vs. with me.

* I was hoping to use the tax ID of the LLC vs. my SS# for the reasons above.

* I didn't want to do business as "Joe Smith", I wanted to have a company name to use because, to me it seems like a better marketing position with clients and in my state, the Division of Banking & Insurance required a DBA or an LLC. So I went with the LLC for the legal protection mentioned in bullet #1.

Any additional thoughts and insights per my questions and comments above ?

-S

 

[souldeux]

http://www.state.nj.us/dobi/insliced/busprodinitialapp.pdf

There's the form to get your LLC licensed.

 

[squeed]

Thanks souldeux. I had no idea how many nickel and dime fees there were to get into this business. I don't know if it is just my state but so far it's $150 for finger printing, $150 for an individual producer license, $190 for a LLC License, $50 to file the LLC, $495 for E&O insurance. I'm going to be out $1K before I sell a single policy!

Guess you have to spend it to make it.

-S

 

[Benefits Man]

yep it does add up...good luck to you

 

[Josh]

Thanks souldeux. I had no idea how many nickel and dime fees there were to get into this business. I don't know if it is just my state but so far it's $150 for finger printing, $150 for an individual producer license, $190 for a LLC License, $50 to file the LLC, $495 for E&O insurance. I'm going to be out $1K before I sell a single policy!

Guess you have to spend it to make it.

-S

My curiosity is getting the better of me, what made you decide to form an LLC before getting started?

 

[radiusbob]

Might want to check with the county and city you live about conducting business and their potential requirements and licensing...That state level could just be the beginning.

 

[Josh]

Might want to check with the county and city you live about conducting business and their potential requirements and licensing...That state level could just be the beginning.

For some reason I get the impression you have no idea what you're talking about.

 

[radiusbob]

For some reason I get the impression you have no idea what you're talking about.

Actually I do...For some legal entities (C Corp, S Corp, LLC, LLP or DBA) to conduct business within county or city limits may need a separate business license (not Insurance) to operate. This may not apply everywhere but better safe then sorry.

By no means am I a lawyer but it doesn't take legals fees to figure this out.

Just go to your local county and city website under the Business section to get a better understanding