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If we have a computer programmer who also happens to be a fitness athlete, and decides to develop a fitness application to help people manage their weight and daily activities, including creating workout or meal plans for them using AI, is it a good idea for him to register an LLC to protect himself?

Consider the hypothetical where one or more of the above services is regulated such that it is not legal for this particular individual to offer them for sale.

I am wondering if this individual registers a company for his app instead of releasing it under his own name, will this provide him with any kind of protection against clients of the app or government scrutiny?"

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  • "Is it a good idea" is very broad. Can you be more specific about what you would hope to accomplish? Commented May 12 at 2:50
  • @NateEldredgeL I would like to launch my application and don't get into a trouble because somebody says "how did you wrote a fitness app while you are not a registered dietitian"? Commented May 12 at 3:07

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Generally, LLC will only protect owners from liability for company's deeds if the owners themselves is not responsible for the deed (specifics depend on jurisdiction). Just naming yourself "LLC" doesn't actually change your personal liability.

If the company did something illegal - the company is liable, and the representative of the company responsible for the actual deed (you, in this case) will be liable as well, not as an owner but as the person doing something illegal.

Consider an example:

Person X bought shares of Enron on a stock exchange and sat at home happily watching their investment grow. Enron was later found to be doing something illegal. Person X lost their investment, but they are not personally liable.

Person Y owned shares of the same company as a founder, and was also an employee of the company with a key decision making authority. When the company was found to be doing something illegal, person Y was not shielded from liability. They were liable, not because they were owners, but because they had the authority and the responsibility to prevent the illegal deed.

See also the example of Elizabeth Holmes, more recently.

In some cases, certain professionals are not allowed at all to be working in an LLC. For example, in California, LLC is not allowed for medical practices, lawyers, or accountants.

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  • Thank you for your answer and the examples you provided. Yes, I have heard Elizabeth's story, but we are not cheating like she did. We are doing something that if anyone asks ChatGPT or Gemini, they will do it for them! However, we want to focus more on each person and their needs, and wrap it with more features and capabilities. I think it would be a very useful and harmless app, but I have a fear of getting into trouble for that. Commented May 13 at 2:37
  • The reason I asked my question here is because when I talk about this in fitness groups, they all say to register an LLC and do whatever you do under that name, not your personal name! There are also a lot of personal trainers doing their jobs completely online, but they have also registered a one-person LLC and do their job under that name. So it was a big question for me to know how much an LLC can help a person do his job compared to when he does it under his name? Particularly in other aspects than financial. Commented May 13 at 2:40
  • @best_of_man you'll probably want to get a qualified advice from an attorney about your personal situation. Laws differ between jurisdictions, you haven't even said what country you're in. I'm not an attorney, but my general understanding is that your personal liability for your own actions doesn't change whether you're working under LLC or under your own name.
    – littleadv
    Commented May 13 at 3:53

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