LLC filings are easy and cheap—true protection is priceless.

You filed Articles of Organization for your own LLC, saving yourself a lot of money. Great! Now you can run the business of your dreams without the fear of impact to your personal assets. Well, not completely.

Liability protection only exist if there is a corporate veil. A corporate what? The corporate veil assumes the business and its owners are separate entities. This separation is one of the major benefits of forming an LLC. So, how do you create it? 

Pennsylvania LLCs are not subject to the same formalities as corporations. The corporate formalities are instructive nonetheless. LLC owners should have an operating agreement. Like corporate by-laws, an operating agreement provides the framework of the LLC. 

New LLCs need start-up capital. LLCs should maintain enough capital to cover its debts. Capital goes to the LLC and not an individual member or manager. Directing it to them can create a commingling issue.

LLCs should maintain separate bank and credit accounts to avoid commingling. Separate accounts make it more difficult for creditors to prove individual liability. Note, this does not cover debts with personal guarantees.  

Whoa! Getting and maintaining liability protection is not as simple as filing Articles of Organization. 

Contact The Skeen Firm today if you have questions about your LLC. We are passionate about business success and asset protection. 

*Disclaimer: this article is for informational purposes only. It is not providing legal advice. It does not create an attorney-client relationship.