Oklahoma Process Server, Private Investigator, Bail Bonds OKC

Why Oklahoma Private Investigators and Process Servers Should Form Limited Liability Companies (LLCs) Instead of Traditional Corporations


One thing that America is known for is its love of the courts.  For hundreds of years, the judicial system in the United States has played an extremely integral role in helping to settle divorces, small disputes, malpractice claims, business disagreements, immigration matters, and even criminal charges.  Needless to say, many business owners usually find out that they are not immune to lawsuits from unhappy customers.  Oklahoma private investigators and process servers can also find themselves sued, and thus they should equip themselves with the legal protections that forming a limited liability company (LLC) can provide.

Limited liability companies can help give any process server or private investigator the chance to cover himself or herself with a “corporate shield” of sorts.  By forming an LLC, process servers and private investigators alike can make it to where, if ever successfully sued, their business assets are the only thing that a plaintiff can take from them.  This differs greatly from companies that are simply incorporated, and all Oklahoma process servers and private investigators need to know this major difference.

Say, for example, that Mark, a customer, sues Jack, a diligent private investigator in Oklahoma, in court.  Mark somehow convinces the jury that he is right and that PI Jack is not.  Furthermore, in a miscarriage of justice the jury awards Mark $400,000.  Private Investigator Jack appeals, but he loses a few times.  Now Mark turns to Jack’s business assets to see what all PI Jack is worth.  However, Mark quickly gets disappointed.

After a  hearing on Jack’s private investigation company’s assets, the courts determine that Jack’s business only has $3,000 worth of business equipment, assets, and property.  Everything else Jack owns is his own personal money and property.  Because Jack’s private investigation firm does not have the other funds, Private Investigator Jack realizes he can never pay off $400,000 and decides to have his company declare bankruptcy.

After the bankruptcy goes through, Mark, the plaintiff in the case, walks away with his $3,000 and the satisfaction of knowing that the “evil” private investigator’s company is now bankrupt.  Private Investigator Jack, thankful that Mark could not touch his personal assets that amounted to $750,000, puts on his Oklahoma process server hat and forms a new company, which is also a limited liability company.

As a process server, Jack also expands his business to include other fields, making sure to take out protective professional liability insurance.  Process Server Jack knows he cannot declare bankruptcy for many years to come, so he takes great care to sign special agreements with his clients, which serve to further protect him from lawsuits.  Now Jack brings his previous customers on board to his new business, and he enjoys the fruits of his labour.

Having said all of this, courts can still pierce the corporate shields that protect business owners from having all of their personal assets take from them.  For example, if Private Investigator Jack had mixed his personal assets with his business assets, then Mark could have asked the courts to pierce this shield.  This is just one of several ways in which this can happen.

All Oklahoma City process servers and Edmond, Oklahoma private investigators should remember another important thing though.  If their business is especially large, all of those assets are subject to a lawsuit.  Thus, if Private Investigator Jack’s private investigation company had amassed assets of $400,000 or more, then Mark could have successfully taken those away from him.  Mark just could not have touched any of the owner’s personal financial assets.

The corporate shield that limited liability companies have was especially meant to protect small businesses like private detective agencies and Oklahoma process server companies like Oklahoma Judicial Process Servers www.OklahomaJudicialProcessServers.com.  Otherwise, many business owners might not want to take the risk of starting a business and possibly losing both their company and personal assets.  All smart private investigation and process server companies in Oklahoma should definitely form limited liability companies, instead of simply becoming incorporated.

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