However, they stop at this point and do not complete the whole process. This puts them at risk for losing the protection for their personal assets they were trying to get by filing the LLC in the first place.
This problem frequently comes to my attention because I'm one of the people they often call to fix the problem.
Setting up an LLC is a process with several important steps. It's not hard, but each step is essential. I'll tell you what these steps are in a minute, but first I wanted to explain how the liability protection of an LLC works.
When a lawyer sues an LLC, they often sue the individual owners also. They do this because they know that most small businesses operated as an LLC do not have sufficient assets in the business to satisfy or pay off a legal judgment so they go after the individuals and their personal assets also.
However, if the owner of an LLC can prove that that they organized and operated your LLC as a separate legal entity under the law, they are entitled to protection. This is called limited liability protection. It's the long established law that protects your personal assets from judgments against your business.
Limited liability protection can shield your home, vehicles, retirement benefits, savings, recreational vehicles and other personal assets from judgments against your business. This protection is one of the main reasons why business lawyers, like myself, strongly urge people to operate their business in the form of an LLC or corporation. However, this protection is not automatic. It requires the LLC to be set up and operated properly. If not, you leave yourself wide open to personal liability.
The fact that we live in a lawsuit crazy society where many people are willing to sue at the drop of a hat is no secret. Unfortunately, small business owners make an easy target. A lawsuit can come from disgruntled former employee, an unhappy customer, an injured person or a business competitor. Regardless of the source, the results can be financially devastating to you. And please don't make the mistake of thinking it can't happen to you. Believe me, it can. I've seen it.
The good news is that it's fairly easy to complete the process of forming an LLC. By doing so, you place yourself in a much stronger position to protect your personal assets. To see if you have completed the process of organizing an LLC, just answer the 6 questions below. If you answer no to any of the questions, then you haven't fully completed the process:
Have you filed Articles of Organization with the State Filing Office?
Have all members or owners of your LLC signed an Operating Agreement?
Have you conducted some form of an organizational meeting and prepared written minutes or other documentation?
Have you prepared written documentation showing the percentage ownership (or sharing ratio between members of the LLC)?
Have you obtained a new Employer ID No. (EIN) for the LLC from the IRS?
Have you set up a new bank account for the LLC that is separate from your individual bank account?
Each step of the process is important to help establish or prove that you have fully organized and are operating your business as a separate legal entity. Operating your LLC as a separate legal entity is what entitles you to the limited liability protection of the LLC structure or form.
You can read more about these steps in the Special Report "Seven Essential Steps in Setting Up Your Own LLC."
Natalie Imbruglia Big Mistake
On a simmering Tuesday morning I learned of the death of a Jamaica Plain woman. A 3-ton concrete section of the Central Artery Tunnel connector ceiling crashed into her car while she and her husband were traveling to Logan Airport on Monday night. By Thursday we learned that at least 50 more such problem areas exist in just the eastbound lane of the Turnpike connector to the Ted Williams Tunnel and more than 300 ?problem? connector bolts that suspend the concrete slabs were revealed this week. From 1990-1996 I chronicled the development of The Big Dig in a series of documentaries for WGBH and the City of Boston, Community Development ( www.polarisproduction.com/about.html ). I felt a deep regret over this Big Dig failure, sadness for Milena Del Valle who lost her life and for her husband, Angie, who escaped the accident but may never escape the memory.
In the early years it was hard to find fault with the CAT project. The Big Dig helped to bail out Boston in the wake of political and economic recession following Mike Dukakis? failed race for the Presidency. The Big Dig provided high paying jobs for managers, engineers, designers and skilled building union workers. The money flowed from the federal spigot and most people were happy...even the neighbors who were mitigated out of the neighborhood into financially greener meadows. Word was out in the media to not rock the gravy boat and to keep coverage positive or access would be denied. Media access was highly controlled at building sites. So what happened to turn our rosy, cozy dream of a snarl free Boston into today's CATmare? The same thing that seems to happen every time people have an opportunity to spend federal money- insufficient due diligence.
The Republican administration put Bechtel/Parsons Brinkerhoff in place to ?manage? the project and to dole out contracts to Republican cronies. The Democratic Legislators and Congressmen made certain that every worker had to join a skilled building union including those working for tiny contracting firms. Altogether this was a recipe for graft and corruption. As the pockets of the politicians grew with donations from contractors, union halls and pension funds, the will to open the Washington wallet remained. Oversight was overlooked. State managers, joint venture partners, contractors and union bosses got so busy counting the money that they forgot to ask what was happening with the project. Sometimes we would show up with cameras at embarrassingly empty sites and have to wait for workers to be assembled by the public relations team that always accompanied us. Taxpayers paid managers too much money to pay attention to the project. None of us paid enough attention to the fact that it was too much money for the project.
Has anyone stepped up to the mike and apologized to Angie Del Valle and Milena's family for the 12 tons of concrete that landed on her besides Mayor Menino of Boston? I have no desire to participate in the finger pointing blame game that is going on right now in Massachusetts between Governor Romney, Turnpike Chair Matt Amorello and Attorney General Tom Reilly. They should all resign in shame for not providing the leadership needed for due diligence of this project from the minute they each took office. The CAT budget raced from $2.3 billion in 1988 with a 3 year timeline to over $14.6 billion and almost 18 years to completion. No one noticed? When leaders of both major parties do nothing to stop a runaway train, it's obvious that the fix is in on both sides of the aisle.
Tom Reilly says he knew there were problems with ceiling panel bolts since a report warning about the bolts was made available in 1999. Why did he wait until someone was killed to investigate? As Attorney General he's supposed to protect the public and now he's running as a Democrat for the Governor's job? I am just as incredulous at the Independent candidacy of Christy Mihos who was on the Turnpike Board. Republican Governor Romney wants to be President? Well, he would fit right in with today's Republican administration and a Congress that supported Bechtel/Parsons Brinkerhoff in Boston, Enron in Texas and have handed the keys for the port-a-potty to Halliburton in Iraq.
I shudder to think of compromises made in Washington. It's amazing that the Massachusetts Democratic delegation stopped at $14.6 billion-or maybe they didn't. Perhaps now that the project is nearing an end it will simply live indefinitely through a series of mishaps and investigations, roadway fixes and criminal investigations, lawsuits and political maneuvers. Each of these twists, turns and efforts to ?fix? the tunnels will, of course, cost a tidy sum of funds from the state and federal coffers, but will be ?necessary? to ?restore public confidence and prevent more lives being taken?.
Translation -it's time for the trial lawyers to get their share of the spoils. It's amazing how valuable a life becomes to politicians after it's gone and how our daily lives seem to mean very little to these people except when they look for campaign contributions.
Both Robert Montgomery & Dale Orlando are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
Robert Montgomery has sinced written about articles on various topics from Limited Liability Company, Home Businesses and tax. Avoid making a serious mistake when organizing your own LLC. Read about the "Seven Essential Steps to Setting Up Your Own LLC" by Attorney Robert Montgomery.. Robert Montgomery's top article generates over 5400 views. to your Favourites.
Dale Orlando has sinced written about articles on various topics from Forex Guide, Politics and Fitness. Dale Orlando holds a Master's degree in community psychology and organizational development. Career successes include grants writing, television production and web development. Polaris Production LLC can assist fund raising in environmental issues, healt. Dale Orlando's top article generates over 5400 views. to your Favourites.
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