4 Ways to Protect Yourself From Business Lawsuits Keep Corporate Veil-Piercing at Bay
Business owners need to take legal steps to protect themselves from being held personally liable for the debts and actions of their business. Forming a corporation or limited liability company (LLC) is a great place to start, but it doesn’t always stop creditors from “Piercing the Corporate Veil” to pursue legal action. To avoid litigious issues that put you personally in the crosshairs, take these four steps. 1. AVOID COMMINGLING FUNDS. You should never take money out of company accounts for personal use nor put money in unless specific circumstances are present. For example, if you put personal money into your business, it should be done as an additional capital contribution that results in an additional ownership stake in the business or as a loan. If you take money out, it must be in the form of a paycheck or through a shareholder or owner distribution. 2. CONDUCT ACTUAL BUSINESS ACCORDING TO LAWS AND REGULATIONS. You must keep up with the necessary laws and regulations throughout the life of your business. For example, state law requires shareholders and directors to hold at least one
annual meeting and convene on any major decisions such as large purchases, sales, investing, and borrowing. This is just one of many rules you must follow. 3. CAPITALIZE YOUR BUSINESS SUFFICIENTLY. You must start new business ventures with the necessary capital to operate them. A failure to contribute enough capital to cover reasonably expected expenses and liabilities during those first months will indicate to the court that there was never an actual plan to operate the business. 4. SEPARATE YOURSELF FROM A SINGLE-MEMBER LLC. An LLC with one owner (or married owners) is considered a “disregarded entity” by the IRS, so you need to properly establish your single-member LLC. If you are a married couple, choose the taxation of your LLC wisely to avoid personal liability. If your single-member LLC is facing significant liability, issue a small equity interest to a close friend or family member to shift the LLC to a multi-member LLC. Avoiding personal liability is one of the key benefits of incorporating your business. If you need help navigating these matters, we’re here for you.
Roasted Sweet Potato Arugula Salad
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Inspired by Nutriciously.com
Enjoy this salad’s warming cinnamon and crisp bites of radish and arugula.
Ingredients • 3 medium sweet potatoes, cubed • 1 tsp smoked paprika • 1/2 tsp turmeric • 1/2 tsp cumin • 1/2 tsp cinnamon • Salt and pepper, to taste • 1 red onion, thinly sliced
• 1 bell pepper, thinly sliced • 3 small radishes, thinly sliced • 2 cups arugula, thinly sliced • 1 1/2 cups cooked lima beans, drained and rinsed • Balsamic salad dressing of choice
can create a precious gift for your children, grandchildren, and other loved ones that will preserve your memory for decades to come.
“A vision is not just a picture of what could be; it is an appeal to our better selves, a call to become something more.” –Rosabeth Moss Kante
Directions 1. Preheat oven to 350 F. Line baking sheet with parchment paper. 2. In a bowl, toss sweet potato cubes with smoked paprika, turmeric, cumin, cinnamon, salt, and pepper. Transfer to prepared baking sheet and arrange in a single layer. 3. Roast for 25–30 minutes until sweet potatoes are nicely browned and fork-tender. 4. In a large salad bowl, combine onion, bell pepper, radishes, arugula, and lima beans. 5. Toss the salad with dressing, then top with roasted sweet potatoes.
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