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