If you own a small business, you probably have it set up as a limited liability corporation (LLC) or a corporation. This limits your personal liability and protects your assets from corporate creditors. Other than hiring a business law attorney in Madison, what can you do to maximize the protection provided by an LLC? Here are some helpful tips.
Keep Things Separate
First and foremost, you’ll need to keep your personal and corporate identities separate. When signing leases, contracts, and other documents, be sure to indicate that it’s being done on behalf of the LLC and that you are signing as a member or shareholder.
Use a Dedicated Business Account
Almost as importantly, you’ll need a separate bank account for your business. Deposit all revenue into that account and use it to pay corporate expenses. Don’t mix business and personal funds as it puts you at risk of personal liability for the corporation’s debts.
In the state of Wisconsin, LLCs and corporations must file annual reports with the DFI (Department of Financial Institutions). It’s simple and fast and you can even do it online. However, if you forget to file for several consecutive years, your company may be administratively dissolved.
Sign Documents Wisely
Pay careful attention when you’re asked to sign personal guarantees. If your company takes out a loan or signs a lease, you’ll likely be asked to sign such a document. This means you’ll be held personally liable for money owed, even if the business is unsuccessful. A business law attorney in Madison will help you understand what you are signing and give you personalized legal advice.
Being a business owner is an exciting concept, but it can be legally complex as well. If you have concerns or questions about an LLC or corporation in the Madison, WI area, or you’d like to start a new company, get in touch with a business law attorney to schedule a consultation.