LLC Owners – don’t let them pierce the corporate veil! Your LLC is a separate entity responsible for its own debts and obligations. The corporate veil protects your personal assets from your LLC’s creditors. To keep your veil intact, you must follow best practices including:
(1) keep the LLC’s finances and assets separate from your own; (2) always keep enough funds in the LLC bank account for at least three months of business expenses; (3) document all transactions and keep the records; (4) clearly state when you are acting on behalf of the LLC with third parties; (5) follow state law regarding LLC operations and regular public filings and fees; (6) have an operating agreement and follow it; (7) don’t try to defraud or cheat anyone with your LLC.
Following these best practices will strengthen the asset protection of your LLC.