There can be many benefits to creating a Limited Liability Company, whether you own an apartment complex, have a consulting business or are selling cupcakes. With a properly organized and managed LLC, you can protect your personal assets from the debts, obligations, and potential lawsuits of your business. In addition, a Limited Liability Company can provide for continuity in the event an owner dies, becomes incapacitated, or leaves the business.
In Wisconsin, the Department of Financial Institutions offers an online method to quickly file Articles of Organization for a Limited Liability Company. Many assume that, after answering a few questions online and paying a $130 filing fee, you are magically protected from liability!
However, filing Articles of Organization online barely scratches the surface of creating an effective Limited Liability Company. There are many additional legal requirements that must not be overlooked. For example, Wisconsin law provides that you must have an Operating Agreement in place which lays out the general guidelines regarding management of the LLC. Without this important document, your LLC provides you with no protection and the creditors of your business could easily “pierce the corporate veil” and obtain access to your personal assets.
The moral of this story is that, if something looks too good to be true, then it probably is. The cost of hiring an attorney to assist you with establishing your Limited Liability Company can be well worth the legal protections you will obtain in the long run. We often discover the dangers of do-it-yourself estate planning when it’s too late – after a death or incapacity. We often discover the dangers of do-it-yourself business planning when it’s too late – after your business has been sued.