Maintaining Corporate Identity
It is important to separate the identity of the corporation from its owners. This will help you protect your limited liability status.• Make all annual filings with the Secretary of State.
- Operate the company under its name, making sure that the people doing business with your company know that the company is a corporation and that they are not doing business with you.
- Avoid giving personal guarantees as much as possible. Documents signed by officers of the corporation should clearly state that it is done on behalf of the corporation without giving a personal guarantee.
- Treat the company as a separate entity. Company payments need to be classified as loans, compensation, dividends, loan repayments, or capital contribution.
- Receive from the company a note, should you decide to lend money to your company.
- Confer with your consultant or plan administrator annually if you have a pension plan, as there may be changes in laws or regulations.
- With the exception of S-Corporations, the company should have a written contract between an owner-employee and the company. The company’s minutes should reflect the adoption of the contract.
- Keep any leases involving the owner and the company (such as the leasing of property) favorable to the company, or at arms’ length to the owner.
- Document all intercompany relationships and dealings if you own multiple companies.
This is for informational purposes only, always consult with your tax or legal professional
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