Most business owners recognize the need for liability protection and that’s why you choose to form a legal entity like an LLC. Once you get the LLC set up, then what? The answer: Maintenance. You must maintain the LLC to avoid risking your business and personal assets.
Yep, this afternoon I did another live broadcast on YouTube and Facebook to help you business owners understand that there’s more to it than simply forming an LLC. It’s like building a brick house, you don’t just dump all the bricks into one spot and call it good. Nope, each brick must be placed “brick by brick” to actually create a solid house made with all the bricks. An LLC is similar in that once you form the LLC with the state of Utah, for example, then there are several things to do for the life of the LLC in order to avoid risking your assets. The goal is for you to be able to say, “Yes, I deserve liability protection!” If you fail to perform the maintenance then, unfortunately, the court will not agree with you and allow a lawsuit to reach your personal assets. Click HERE to watch the video OR if you want to skip the video, here are the bullet points:
- You can’t control other people. You are in control of how you run your business, so protect your business.
- Maintenance means keeping yourself separate from your LLC. For example:
- Renew registration yearly;
- Keep business and personal bank accounts separate so NO comingling of funds;
- Sign contracts on behalf of the LLC and not yourself under your individual name; and
- Documentation starts with an Operating Agreement which must be tailor-fit to your company and not downloaded from the internet.
- Documentation continues with an initial consent form and then ongoing consent forms that track business decisions.
- Do you have an operating agreement and are you documenting business decisions?
Here’s a Press Release where you can read more: Will Your LLC Legally Protect Your Personal Assets?
Hiring a business attorney is smart and probably won’t cost as much as you think. We provide our clients with an “LLC Owner’s Manual” that will help you through the life of your business to keep it protected and maintained appropriately.