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CoachMike and Lighthouse - you both make excellent points. I'm definitely on board with Lighthouse in promoting non-incorporating until you determine the liability and feasibility of your new entity. Incorporating just sets you up for more expenses and headaches then you need when starting a new business. However, with regard to another thread that asked about an EIN, although I am a sole proprietor, I obtained an EIN because I didn't want to give out my social security number to everyone. Further, once you obtain an EIN as a sole proprietor, you can use that same EIN for as many entities as you choose - as long as you remain a sole proprietor. This certainly makes things much easier all the way around! I have two different businesses for which I use my EIN and I've never had a problem in the 8+ years I've been in business.

Now, for the question at hand, if Silver is hosting "at home" jewelry parties, she will have liability in the respect that she is inviting people to her home. If someone should slip, trip or fall resulting in personal injury, she would be liable for damages if the person should sue. Her homeowners insurance would cover damages up to the policy limit but, anything in excess of policy limits, she would be personally liable. This doesn't affect her concept of selling jewelry - it should be taken into consideration when inviting people to your home for business purposes.

She may be best served by obtaining an umbrella policy covering her home, business and personal assets. You can obtain a $1,000,000 policy for a reasonable amount of money these days. Although it seems ridiculously high, I can tell you that in today's society you can't have enough.

I've been a paralegal for over 25 years and have seen quite a bit in my experiences. You can't take enough precautions these days.

Good Luck!
Valerie Nowottnick
Paralegal Consultants
www.paralegalconsult.com