Forming an LLC or corporation and having it survive an attack are two separate matters. Just filing an LLC may provide you with no benefits or protection. This is why people pay $1500 for attorneys to do it for them. You certainly can do it yourself, but beware. If a judge determines that the LLC is a straw-man, created for the sole purpose of evading creditors he may rule that it does not exist.
In order for an LLC to be valid, you must follow certain protocols. Although not required by law, it is a good idea to have a solid operating agreement, annual meetings and minutes from those meetings. If you are the only member, the meetings and minutes will be very short.
The operating agreement is the most important piece to making sure that the LLC is in good standing. Our agreements are at least 25 pages long and detail every conceivable matter that could ever come up.
Lastly, never ever co-mingle funds from your LLC with your own funds. If you use the LLC’s debit card to pay for something, either make sure you have the receipt and it was for a valid purpose – or if you just don’t have the right debit card on you, create a payable from the LLC to you personally and have a paper trail. The last thing you want is for your LLC to be pierced by a creditor, or for a liability arising out of the LLC’s business activities to become a personal liability.
Questions? Call David Disraeli at 512-464-1110 or book a call here.
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