WHAT IS A LIMITED LIABILITY COMPANY?
A limited liability company (LLC) can offer business owners powerful protection from creditors. However: this entity is not available to all business owners, and owners must operate the business properly in order to enjoy the protections of LLC status. An Akron business attorney can help you qualify for LLC status, form the business properly, ensure that you remain eligible for LLC protection, and reduce the risk of costly disputes between business partners.
WHAT IS IT?
An LLC is a type of business entity that offers financial protection for its owners. If the LLC is properly formed and managed, it is treated as a separate legal entity. This means that the owners’ personal assets cannot be used to satisfy the debts of the LLC. For example, a customer slips in a store that is owned by an LLC. The injured customer files a personal injury claim against the LLC and wins a judgment against it. If the assets of the LLC are insufficient to pay this judgment, the customer cannot access the owners’ personal assets for the balance.
An LLC can have one member or multiple members. It can be managed by its members or by identified managers. LLCs also offer tax benefits in certain situations. It is important to consult with a business attorney or accountant to determine whether your company will benefit from an LLC tax status.
HOW DO I FORM AN LLC?
The process of starting an LLC begins by filing paperwork with the Ohio Secretary of State. Some business owners choose to fill out simple templates online. With an attorney’s help, however, you can execute detailed business formation documents that offer your business greater legal protections. Detailed articles of organization can help establish that your business is being operated as a separate legal entity. They can also reduce the chances of disputes between members, which can save the time and expense of arbitration or litigation. These disputes tend to impact a company’s profitability as well, so it is important to prevent them when possible, and resolve them quickly when it is not.
WHAT DO I HAVE TO DO TO MAINTAIN MY LLC PROTECTIONS?
The most important step a business owner must take to ensure LLC protections is to treat the business as a separate entity. There must be separate accounting for the business and for personal assets. You must maintain a separate bank account for the business, and segregate business funds from your personal funds. If you fail to do this, a court might find that you have not treated the business as a separate entity. This can allow a creditor to access your personal funds to satisfy the liabilities of the business.
AKRON BUSINESS LAWYERS FOR ALL LEGAL ISSUES SURROUNDING LLC STATUS
At Weisensell, Mastrantonio & Orlando, LLP., our limited liability company attorneys are experienced in all legal matters surrounding the formation and management of an LLC. We will help you qualify for – and maintain – LLC protection under Ohio state law. Contact us to schedule a consultation.