Very important!
A key point to remember is that the corporate veil is fragile. You have to treat it carefully and protect it at all times. Once you set up your entity and run it properly you will have created a corporate veil that will be extremely difficult to pierce if it can be pierced at all.
Some investors set up a new corporate entity for every project. For most people that would be overkill. Some investors in highly litigious markets do so and consider the effort and expense just the cost of doing business. This is a matter that you’ll have to consider for yourself.
There are several key maintenance procedures each business owner should complete:
- Separate checking between each company, including business and personal finances – No co-mingling.
- Create letterhead for each business operation and USE IT!
- Have business cards for each business entity and distribute them in each transaction.
- Use the entity name on all contracts and legal documents
- Title/ownership of all business assets should be in the entity name.
- Make sure and complete your annual meetings and maintain a Corporate Book
