R. Shawn McBride recently spoke about protection and lack of protection concerning LLC.
Hey folks, Shawn here with you. LLCs mean limited liability, right? You formed your company, you don’t have to worry anymore do you? Well, maybe not. Maybe so. Just because you formed an LLC or a corporation with your state and did that basic paperwork doesn’t necessarily mean that you’re going to have liability protection. There’s more to it than that.
You need to run your business like a business. You need to have the proper accounting records, you need to have the right documents in your files, you really need to treat your business like a business, and you not only need to do it on your end, you need to show other people that you’re a business. When you do that, now you’re starting to build the blocks where a court’s going to respect your LLC. Because what happens is this, people form their companies to protect their personal assets. You want to have that firewall, that’s why people do this. You want to know that if there’s a problem, people aren’t going to go after your personal assets. But the court’s got a problem. If somebody gets hurt or has a loss because of your LLC or corporation, they’ve got to figure out who the winner is. Either you get to keep your personal assets, or somebody doesn’t get everything they want. And the court’s got to figure out who wins.
So how do they figure out who wins? They look at what’s fair, you get a judgment call largely by a judge, and the judge is going to look at, did you treat this like a company? Was it really a business? Or did you just play around and mix your personal assets and business together until things got bad and then you said I’ve got liability protection?
So you really want to do things right from the beginning and that means getting the right team in place. Lawyer, accountant, protection people, insurance – all these things work together and when built correctly you’re going to have liability protection. But when you don’t build it correctly the court’s going to say you didn’t do the right stuff, I’m sorry I can’t help you. You see the difference there? Fundamentally different problem, so you want to do it right, get the right team involved, build the blocks correctly, lay the foundation of success and move on to great things. Do your LLC right. Just because you formed an LLC doesn’t guarantee that you have liability protection. Build it right, do it right from the start.
If these are things you’re struggling with, check out the McBride for Business blog and the McBride Attorney’s blog at www.mcbrideforbusiness.com and www.mcbrideattorneys.com. Each of them will give you valuable resources that you can use. The McBride for Business YouTube channel and the R. Shawn McBride fans and audiences page on Facebook all have videos helping you, the business owner do things the right way. And make sure you get your business valuation checklist.
I’m R. Shawn McBride, I’m here for you if I can help your group with a speech to get you thinking this way and doing the right things I’m here for you, reach out to my office. You can find me at the R. Shawn McBride fans and audiences page. Talk to you very soon.
This posting is intended to be a tool to familiarize readers with some of the issues discussed herein. This is not meant to be a comprehensive discussion and additional details should be discussed with your attorneys, accountants, consultants, bankers and other business planners who can provide advice for your circumstances. This article should not be treated as legal advice to any person or entity. Freeimages.com/Photographer Milda K.
About the Author
Shawn McBride — R. Shawn McBride is the Managing Member of The R. Shawn McBride Law Firm, PLLC. Shawn works successful, private business owners in their growth and missions to make a company that stands the test of time. You can email R. Shawn McBride or call (214) 418-0258.
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