:: If a judge can’t tell what belongs to your business and what belongs to you, you might have a problem.
If a judge also can’t tell that you are legally distinct from your LLC, you might have a big problem.
If a judge also sees your company can’t pay back its debts and has caused others monetary loss, you now have a really big problem.
To never need to find out how big is really big — run your business like it’s its own person and run it honestly.
It is true that once you have an LLC up and going, you are generally protected from being personally on the hook if the company runs into trouble. A person suing you and coming after your house, bank accounts, and car should expect to run into a brick wall.
But an LLC has its limitations. After all, it is right in the name, “Limited.”
One of the most common ways a court will sweep aside your limited corporate protection (“pierce the corporate veil”) is by determining that your LLC is your alter ego.
Are your personal and business assets are all in the same accounts? Do you haphazardly ignore corporate formalities, cosign for business loans, put your own property up as collateral, and confuse others as to whether they are doing business with you or your LLC? If so, your LLC is your alter ego and your personal assets are at risk.
Please don’t do these terrible things. Rather, run your business like it’s its own person. Have a business checking account and credit card. Only use them to pay yourself and your employees and for business expenses. Finalize and sign contracts, leases, invoices, and documents in your LLC’s name.
Above all, run your business (as with all things in life) honestly. The rest always takes care of itself.
#twoisbetterthanone #businessgrowth #businessformation #LLCs
WEST AUSTIN LITIGATION 