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COULD THESE SCENARIOS happen to you or someone you know?
× An injured apprentice blames you for causing his on-the-job injury. He filed a lawsuit and won a huge judgment against you. However, your insurance does not cover it, and the corporation under which you operate your shoeing business is now penniless.
× Under the name of your corporation, you entered into a contract to buy and customize a truck. But your corporation could not make the payments, and now the dealership claims it will file legal proceedings in an attempt to make you pay the debt personally.
In today’s litigious society, business owners are wise to look for ways to keep their homes and personal property out of reach of claimants and creditors related to their business activities. A legally established business entity, such as a corporation or limited liability company, can be a powerful shield to protect your personal assets against claims brought by business creditors. But having a business entity established is merely the beginning. A valid business entity requires an ongoing series of burdens and obligations.
Every small business should be aware of “piercing the corporate veil.” This is a legal phrase that means the court will disregard your corporation or business entity as if it…