Let’s have “the talk” about that liability protection. What kind of liability protection do you actually get from an LLC? Liability protection varies from state to state, but there’s an important fact that applies to ever LLC no matter where it’s located.
You have to behave like an LLC to really be taken seriously.
You have to behave like an LLC to really be taken seriously. It’s like business structure adulting. There should be minutes from director meetings, property titled appropriately (car registered to the LLC), no mingling of LLC funds with personal funds, etc. I advise my clients to view the LLC as an unrelated person to help create context. For instance, would you do business with somebody you don’t know the same way you do business with your LLC? Would you personally drive a car registered in someone else’s name? Would you pay your employee’s personal expenses with business funds? Absolutely not. But when a business owner is dealing with themselves, it’s easy to forget about those legal lines you paid to create.
Having business structure amnesia could put holes in that fence of liability protection you thought surrounded your personal assets.
Having business structure amnesia could put holes in that fence of liability protection you thought surrounded your personal assets. You must look, act and sound like an LLC otherwise the veil of liability could vanish under scrutiny by the courts. I advise my clients like this: the moment you are serviced notice of a liability claim you’ll be glad you always did those annoying, ridiculous and seemingly unnecessary tasks that give legitimacy to your business structure. Over the course of my years in practice, I’ve found that it is easy for most business owners to run heir business and forget about the formalities of their business structure. This is an honest mistake but it could prove to be costly because a few basic practices weren’t followed consistently.
Don’t compromise the protection you have established around your personal assets. If you want help developing healthy habits then give us a call.