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Legal Eagle
Legal Eagle, Attorney
Category: Business Law
Satisfied Customers: 396
Experience:  Serving business clients in private practice for 19 years.
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Question about personal liability registering a RIA-Firm

Customer Question

Question about personal liability registering a RIA-Firm (Registered Investment Advisor) as a partnership versus a corporation. Does the corporate shell protect owner's personal assets from liability claims, e.g. a client files a lawsuit to recover investment losses, or can it be pierced? In other words would a partnership with sufficient E&O insurance offer enough protection against personal liability? I'm interested in hearing your thoughts/comments.
Thanks in advance
John
Submitted: 1 year ago.
Category: Business Law
Expert:  Legal Eagle replied 1 year ago.

A corporation or limited liability company would provide a level of liability protection for the business and your personal assets. However, as a licensed professional, you cannot avoid malpractice liability by using an corporate entity. The liability follows the licensed professional. This applies to doctors, lawyers, engineers, and licensed brokers. Your best best and protection is to have professional malpractice and an errors and omissions insurance policy. Pete.

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