Is forming an LLC soon after being made aware of a lawsuit a legitimate way of protecting your personal assets? Say you operate a quasi-business. You make money, but the operation is categorized as a hobby by the IRS and isn't actually registered. If someone sues you, can you quickly form an LLC and then "transfer the blame" to the LLC, or will the court see what you're doing and still make you liable?
No An LLC that didn’t exist at the time of the act or omission that caused the loss being sued over is not a valid defendant. They would sue you personally and all of your assets, including the LLC, would be available to the creditor.
The question of whether a person was acting on their own behalf or that of a company would generally be a question of fact, so if such a case came to court it would be for both sides to present evidence and argue for their interpretation of it. In most cases the context makes it clear. You mention having a company email domain and associated email signature; that is certainly good practice and would go a long way towards creating a presumption that you were acting for a company. Also signing yourself with your job title or role (e.g. "Joe Bloggs, Chief Bottlewasher") makes it clear that you are speaking in your role as an employee. The content of the communication also matters; if you use your company email address to order goods from a supplier that the company has used before then the recipient can reasonably assume that you are ordering on behalf of the company and a court is likely to agree. OTOH if you use the company address to send libellous emails then the recipient would have a much higher bar to claim that this was the company view rather than a personal one.
What follows is a broad overview. I'm not an expert in this; I just have a bit of experience in this due to a tax situation my wife &amp; I experienced a few years ago. Please do not rely on this advice except as a starting point for more Googling. Your obligations (and your assistant's) will depend on whether the assistant is an employee or an independent contractor. In general, an independent contractor is someone you hire to "get a job done"; you have minimal control over the manner, time, place, tools, etc., that the assistant uses. An employee, on the other hand, is someone you hire to come to work at a particular time and do the job a particular way. (I'm glossing over some details here; see the IRS link above for more details.) If your assistant is an independent contractor, and you pay them over a certain threshold ($600 for 2020), you must provide them with Form 1099-MISC, and file a copy with the IRS as well. Your assistant will then be liable for income taxes on this amount, as well as self-employment tax (see below.) If your assistant is actually an employee, and you pay them over a certain threshold ($600 for 2020), you are required to provide them with a W-2 form, as well as filing a copy with the IRS. In addition, if you pay them more than a higher threshold ($2200 in a tax year or $1000 in any quarter for 2020), you are responsible for withholding taxes from their paychecks, as well as paying the employer's portion of Social Security, Medicare, and/or federal unemployment taxes. How to figure these taxes is complex, but generally the employee must provide you with a completed W-4, and then you must provide them (and the IRS) with a W-2 at the end of the tax year. See Publication 15: Employer's Tax Guide for all the gory details. The self-employment tax is designed to effectively cover the employer's portion of these taxes for self-employed workers. As you might imagine, employers are often tempted to misclassify employees as "independent contractors", since this means that this tax liability gets pushed from them onto their workers, as well as just making the employer's life easier. The Feds will not take kindly to such misclassification if it is discovered. Finally, for the state of Connecticut, consult the CT 1009-MISC filing guide (if your assistant is an independent contractor) or the Connecticut employer's tax guide (if they are an employee). The distinction is pretty much the same as at the federal level.
When an entity goes bankrupt, its affairs are subject to detailed court supervision and creditors rights with respect to the bankrupt entity are severely limited by an "automatic stay" that funnels all disputes between creditors and the entity to bankruptcy court. This process, in the case of a medium to large sized business, is very expensive. If lots of creditors of the consolidated group are creditors of an entity that doesn't have any assets, it may not be worth the trouble to go through that process, since those creditors will get nothing, or there may be other reasons that it needs to function as a non-bankrupt entity. The creditors of the non-bankrupt LLC could force an involuntary bankruptcy, if they suspect that some creditors are being unduly favored or if they want more transparency, but they might prefer a non-bankrupt company if it allowed them to pursue their creditor's rights outside of bankruptcy and it had some assets. There are some very tricky collective action problems involved in cases like these, that must be made with imperfect information. It could be that the parent company is looking for a quick reorganization that is insulated from the day to day affairs of the company and involves a restructuring of only long term debt and a subsidiary bankruptcy would complicate a simple, pre-packaged plan. Still, it is hard to know with limited information.
Yes. It is legal for them to do so. Also, they are often required, by their insurers and lawyers, if not as a matter of law, to maintain them for seven years in most cases, so that the information is available if a lawsuit arises from any of their dealings with you (e.g. if they receive notice of a lawsuit involving a Zipcar you were allegedly using or had under your control at the time of an accident, or if there is a class action lawsuit over alleged breach of contract or consumer laws involving their charges to you). There are virtually no circumstances, with the possible exception of certain credit card account information, when someone has a duty to destroy records maintained about you under U.S. law. In this particular instance, everything on your driver's license is a matter of public record in any case, so your privacy interest is reduced for this reason as well.
What does your contract with your client say? What does your contract with your sub-contractor say? Typically the client contract will not specify HOW the work gets done, just the deliverable(s), the price and the liability. Unless your client contract says otherwise, it's perfectly legal for you to farm out the work. It's also perfectly fine for you to deduct the cost of the sub. As long as that's profitable the IRS will have no problem for that at all: that's a perfectly normal business practice. Things are a bit more complicated if you farm out at a loss since that could be interpreted as a tax evasion scheme. However, as long as it's reasonable, that's fine. If there are defects in the work product, the client will come after you, regardless of who did the work. It's generally your responsibility to fix the issues, cover damages etc. You, in turn, can try to recover your damages from the sub, but that depends on the nature of the contract you have with the sub.
It is certainly possible to incorporate companies with the same name in two different states. If neither company does business in the other person's state under that name, it isn't actionable for either company. If one company was already doing business under its name in a state where another company is formed under that name, it would usually be possible to force the new company to cease and desist from using that name, either with an action directed at the infringer and the Secretary of State (or other official charged with business incorporations in a state) of that state, or in an action directly against the infringer alone. Also, even if a trademark isn't formally registered, it can arise at common law simply through use of a name in a particular market in a particular place. This is harder to prove and the remedies for violating a common law trademark a more limited, but it is not entirely unenforceable.
There are two basic problems with your theory: You say: can't one accept a case on contingency and "as time permits," so that in such an event one would simply drop the contingency case (or, if it looked promising, hand it off to some other lawyer in a slump)? No. you can't. If you take a case, then drop it because a more profitable case comes along, you might well be disbarred, not to mention sued by the client you just threw over. You might even spend a night in jail for contempt--in many cases, you are not allowed to simply drop a case without the court's permission. So if you accept a contingency case, you accept it until (1) the case is over, (2) the client fires you, (3) you, the client, and the judge all agree you can quit, or (4) you can convince the judge you should be allowed to quit regardless of the client's wishes. Until then, you are stuck with the time and expense involved with handling the case. "Expense" is the second problem. You seem to be under the impression that once you've paid for the office and the coffee maker, there's no downside in pursuing a contingency case. But filing and pursuing a lawsuit cost money, not just time. Copying and coding documents costs money. Stenographers for depositions cost money. Just filing a lawsuit often costs a few hundred dollars. Hell, in a major lawsuit, you will probably spend a few hundred dollars just on postage. And a lot of commercial litigation now involves expert witnesses, whose fees start at a few hundred dollars an hour. Normally that all gets billed back to the client, but on a contingency case the lawyer often absorbs most or all of it. So from a lawyer's perspective, even if he or she is not working right now, "any positive payout" isn't enough. It has to be enough of a payout, and enough of a chance of winning, that the expected reward is worth paying, potentially, the cost of a trial, and forgoing other work if things get busy again while you're trying to prep your contingency case for trial. The fact is, for a lot of this sort of case--even if it looks "potentially profitable" to a non-lawyer--is going to be less profitable, in the long run, than spending the same amount of time playing golf with people who might actually pay you by the hour to do something. Also, two quick notes: Your suggestion of raising the contingency up to 100%, or close to it, won't help--it's illegal in many jurisdictions, and unethical in all of them. As a side note, even if a lawyer did take one of these cases, it wouldn't do you any good, since lawyers are prohibited in most cases from splitting their fees with non-lawyers.