So you’ve started your business and set up your LLC. Great! But are you actually doing the proper maintenance to ensure that your LLC is actually going to protect you?
The entire purpose of setting up an LLC or corporation is to keep all your personal income, expenses, and debts separate from the business/corporation. If you are the unfortunate subject of a lawsuit against your business, you will not be personally held liable* if you maintain your LLC correctly and keep everything separate. There are, of course, exceptions, but this should always be top of mind: keep your business and personal affairs separate. As a small business owner, you want to be especially vigilant because it’s often so easy to blur those lines.
Consult with your tax professional or attorney to discuss the following:
- co-mingling personal and business funds/expenses? BAD.
- keeping your operating agreement up to date? DO IT.
- advising your board of directors and having quarterly and annual meetings. IMPORTANT.
These are all things that could come back to bite you during a lawsuit if you aren’t maintaining your LLC. Be sure to check on the requirements in your state, because they differ depending on where you set up your business.
Contact our office if you’d like to discuss how setting up a corporation or LLC, and maintaining it correctly, can benefit your business.
(*Please note the following disclaimer: we are not attorneys and this blog post is not legal advice.)