LLCs Part 1: Your LLC isn’t protecting you - let’s fix it

This is the first in a series of six videos that will help you protect your personal assets.

Does my LLC or corporation protect me?

 Probably not!

You created your LLC or small business corporation for two reasons, tax benefits and liability protection. Let’s talk liability protection.

Rarely do I see an LLC or small business corporation that will give its owners liability or asset protection. Why? No one follows the rules, so the liability protection rules won’t follow you!

Most feel once they go online and file articles of organization for their LLC or corporation, they are good. Quick and easy to do. Sadly, that’s not the case. There are so many ways for you to lose those protections, or never even get them in the first place. And if you are just a one or two owner business you are even more at risk

Larger entities often have multiple owners and professionals involved that ensure the company is abiding by at least the basic rules. They have to talk to each other before entering into agreements, taking money out, and using the company’s assets. As such, they generally follow the rules, they document transactions, and they then get liability protection.

Smaller entities like yours are often owned by just one or two people, maybe you and your spouse. You’ll do whatever you please as there isn’t anyone else to ask. And you’re too busy to write down what the decision was and implement it with proper documentation. If you don’t follow the rules and you’ll get no liability protection. Too bad.

But it’s just my spouse and me.

The sad truth is that the smaller you are, or the fewer owners that company has, the more documentation you need to get liability and asset protection. And in 45 years of working with small business owners, I know that 90% or more don’t have the protection they think they do – because they don’t follow the rules.

But I thought that LLCs didn’t need to do minutes. That myth has been around forever. The other attorney that is suing your business knows it’s a lie and they are going to have a field day with you.

And even more fun, if you didn’t respect the rules not only will the other attorney win easily when suing you, the IRS will also have a great time trashing your tax benefits. You can’t afford to take the chance.

So, what do I do?

In this series of videos on LLCs and SBCs I’ll walk you through the basics of what you must do and document in order to achieve the liability and asset protection you need.

Armed with this you’ll have a much better chance to have your company’s status upheld and get the protection you need. If you need some help taking care of this because you are too busy or just don’t want to do the documentation, I’ll give you an alternative to look at.

It’s your financial future, it’s your call. Take a few minutes to learn the basics in the next few videos. See you there!

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