Why is Your Corporate Veil So Important?
Most business owners assume that simply incorporating will protect their personal life and assets from all the liabilities that come with owning a business. Every year courts prove this assumption to be false.
The Corporate Veil
The corporate veil is a legal term for the liability shield your corporation, limited liability company (LLC), or limited partnership creates around you and your personal assets.
Typical Assets Protected by a Strong Corporate Veil
- Home and Vacation Property
- Automobiles and Other Personal Assets
- Personal Savings
- Retirement Money
- Personal and Business Real Estate
- Education Funds
- Other Businesses
The main reason people incorporate is to achieve the liability protection of a corporate veil. When properly managed, corporate veils provide significant personal liability protection against lawsuits, audits, creditors, and other disputes. In essence, your corporate veil separates your business life from your personal life as far as liabilities are concerned.
Equally important; complying with state, federal and corporate regulations is what you promised to do when you created your corporate entity. It was your part of the bargain. It is the right thing to do. When you faithfully fulfill your governance responsibilities, you can rest easy knowing you have done all that is required.