Does anyone use a Federal EIN number for mystery shopping?

Hi, I'm a long time reader of this forum but this is the first time I have posted. I have been mystery shopping for over seven years and am signed up with over 200 companies. In that time I have been using my name and SSN for payment. I have recently been talking to an attorney who has advised me that I need to immediately set up an LLC with a unique business name and use a Federal EIN number. He advises that this will shield my personal assets from potential lawsuits I have never had an issue, but it sounded like good advise. The problem comes in when I check the websites for many of the companies that I shop for (Marketforce, Sinclair, and many others). They do not have a spot for a business name or an EIN.
Is there anyone out there who has been through this transition already and how did you handle it? Did you just stop shopping with those companies who are not set up to pay you as a unique business or were they able to accommodate you? Any information or advise would be greatly appreciated.

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Why did he suggest a name other than your own? What makes him think you will be sued?

Equal rights for others does not mean fewer rights for you. It's not pie.
"I prefer someone who burns the flag and then wraps themselves up in the Constitution over someone who burns the Constitution and then wraps themselves up in the flag." -Molly Ivins
Never try to teach a pig to sing. It's a waste of your time and it really annoys the pig.

Sounds odd to me...maybe you should get a second opinion. I've been shopping for 14 years, never had an EIN. Don't plan on getting one, either. Only a few companies have ever even asked for one.

The risk is primarily from someone whom I might hit with my car in the course of doing shops. I drive nearly 30,000 miles per year and the fear is that an at fault accident could result in the injured party attempting to sue for more money than the limits on my auto insurance policy. I was told that plaintiff lawyers in these situations tend to look at the defendants' overall assets and sue for as much money as they can get. As far as using my own name is concerned, I was advised that the business name needed to be unique, so that there was a clear separation of business vs. personal assets.

Isn't the operative phrase "attempting to sue."

Be aware that LLCs are very easy to create, but dissolving them is more involved. There is a little more record keeping to do and some rules to follow. LLC and EIN were basically just more things to contend with. After having gone both ways in the past for different ventures, I am happier with a Sole Proprietorship.

I have a Sole Proprietorship which I operate with my SSN. I also have an LLC with an EIN. The net effect is to require two Schedule C forms. No big deal. As a consultant (not necessarily for mystery shopping), having a business name, LLC, and EIN lends credibility and some clients require it.

Shopping Southeast Pennsylvania, Delaware above the canal, and South Jersey since 2008

I would talk to your homeowners insurance agent. For a few hundred a year you can get a million dollar umbrella policy that will cover this and if someone slips and falls in your kitchen--the umbrella only kicks in after your normal insurance coverage is exhausted
.

@OHGuy wrote:

I drive nearly 30,000 miles per year and the fear is that an at fault accident could result in the injured party attempting to sue for more money than the limits on my auto insurance policy. I was told that plaintiff lawyers in these situations tend to look at the defendants' overall assets and sue for as much money as they can get.

Are you driving your own vehicle? If so you might want to consult your lawyer about that also. I believe you will need to retitle your vehicle in your LLC name, which comes with all kinds of other fun things as now you either have to have a second vehicle or you have to start logging miles for personal use also and then accounting for them as income on your taxes.

There are reasons that a body stays in motion
At the moment only demons come to mind

Heavy-up the liability coverage on home and auto and then add a $3 million umbrella liability policy. Sounds to me like the attorney is an alarmist.

Based in MD, near DC
Shopping from the Carolinas to New York
Have video cam; will travel

Poor customer service? Don't get mad; get video.

Thanks to everyone for your thoughts. I am aware that having an LLC will require me to re-title my vehicle. My biggest concern at this point is getting the various companies I do work for to pay me as a business. Has anyone had any experience working through this issue?

You can have an EIN in your own name; but that does not change your status the way that an LLC would. BUT, I expect that the LLC bit is serious overkill. Also, have you checked to see what state and local taxes and regulations click "on" when you register an LLC?

If MSC payments still come to your personal name, I doubt that having an LLC would cover your MS activities. Perhaps the attorney does not fully understand the MS business? I am not accusing him/her. It is just that we have had several shoppers in the past posting professional tax advice, for instance, that was clearly from someone who had not clue about what we do and how we do it. Misinformation on both news media and reality shows about MS would leave the impression that we are continually at risk of all sorts of things that just do not occur in the real MS world.

Based in MD, near DC
Shopping from the Carolinas to New York
Have video cam; will travel

Poor customer service? Don't get mad; get video.

I am no attorney, but my understanding is that an LLC will not protect me from liability if I am in an auto accident. It might protect me if my employee or business partner is in an accident, but it won't protect me personally if I am driving.

That brings up a good point. How often do we have another person in the car when doing MS unless it is for a restaurant, amusement park or hotel shop? In my case, never.

Based in MD, near DC
Shopping from the Carolinas to New York
Have video cam; will travel

Poor customer service? Don't get mad; get video.

With an LLC, a franchise tax return is required to file in many states as well. It is not difficult and usually no money due but it is another requirement.

CPAs and attorneys have been recommending LLCs for some time because of the protection it offers from frivolous lawsuits. If it is a one member LLC (you only) it is still recorded as a Schedule C on your return. A separate return is not necessary.

You mean a separate Federal return, correct? State and local municipalities will probably have different rules.

Years ago I changed my individual proprietorship to a sub chapter S corporation. Mu accountant felt, in this litigious society, it would be better for my corporation to get sued rather than me personally, if such a situation came about. I still have my sub chapter S and use it in place of my SS # for MS. In my previous carrier I presented products to a buyer and they were resold to the consumers. If a parent bought, for instance, a pair of shinguards for their child and he broke his leg the suit could involve the retailer, the manufacturer and everyone in the middle including me. I can see a situation now where I am doing a gas station audit and back into a customer or her car or a gas pump or whatever. Same situation as the shinguard - sue everyone involved. So the answer is yes, I use a FEIN.

I am registered with many companies, but Trendsource is the only company, to my recollection, which required a EIN. I often worry about my SSN being abused, and frankly, I wish more companies' would offer us the ability to use an EIN. ** Is the apostrophe after "companies" correct?

No. Your use of companies was to indicate a plural which doesn't require an apostrophe AFAIK.

@Shopperfest wrote:

** Is the apostrophe after "companies" correct?

I have an EIN and I use it in place of a SS# whenever I can, just to shield my number. Having one, just like that, does not shield YOU from anything. They are very easy to get.

All of our SSNs are out in the data bases of the bad guys, folks. They don't need to raid MSC data to get them.

Based in MD, near DC
Shopping from the Carolinas to New York
Have video cam; will travel

Poor customer service? Don't get mad; get video.

And msc databases aren't where they would go. Why try to get 10,000 ssn when you could get 1.000.000 somewhere else?

There are reasons that a body stays in motion
At the moment only demons come to mind

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