Protecting your LLC Limited Liability Status
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. Ensure that you:
- 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 contributions.
- 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 the laws or regulations.
- 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 by no means a complete list, make sure to check with your legal professional for issues pertaining to your company
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