When you first started your company, you most likely spent some time working with a small business lawyer in California to figure out how to protect yourself from the organization’s liabilities. This practice is known as creating a corporate veil.
Of course, if you want to maintain your financial protection into the future, you will need to make sure that you do not do anything that could pierce that corporate veil. You can accomplish this feat by:
Not Commingling Business and Personal Finances
In the early stages of a business, it can be easy to fall into the trap of paying business expenses with your personal credit card or personal bills through your business bank account. Unfortunately, when you mix your finances in this way, the law may refuse to recognize your company as a separate entity.
When such a ruling is made, the liability protections that you received from your company will disappear. As a result, if someone wishes to sue you, they may be able to target your personal assets, such as your home or your car.
If you need some assistance figuring out how to keep your business and personal finances separate, you would be well-advised to speak with an experienced accountant or small business lawyer in California.
Documenting Your Business Actions
To make your company more legitimate in the eyes of the law, you would be wise to document and retain any actions that your organization takes. This generally means keeping records of all of your meetings and storing copies of your contracts. Maintaining a record of your business actions will allow you to show a court that your company is fully operational, and is not merely being used as a shell to protect your assets.
You can also use your saved paperwork to prove that you entered into contracts and agreements as a representative of your business – not as a private citizen. Such a document will come in extremely handy if a vendor tries to pursue you personally for a debt that actually belongs to your company.
For a more complete breakdown of the information that you should be documenting, you can speak to an experienced business attorney in San Diego – like those here at the Semanchik Law Group.
Registering Any Assumed Business Names
If your company does business under multiple names or brands, you must ensure that you have properly registered all of them. That’s because if you run into any legal issues while operating under an unregistered name, you may be held personally responsible.
Operating under an alternative, unregistered name may also invalidate any permits or licenses that are held by your main company. If you are found operating without a necessary license, you may be held personally responsible for any fines.
The process of registering a new business name in the state of California is fairly straightforward. However, if you run into any difficulties, you can always reach out to a member of the Semanchik Law Group team.
Filing Annual Paperwork with the State
To maintain your corporate veil and your company’s legal structure, you may need to make an annual filing with the state of California. In many cases, you will also need to pay a small fee.
Failure to comply with these regulations may impact the legal status of your organization. It may even cause your company to be dissolved entirely. If such a scenario were to happen, you would then likely be classified as a sole proprietor and would most likely be held personally responsible for any liabilities.
If you aren’t quite sure what documents you need to file with the state each year, you should speak to a small business lawyer in California as soon as possible to make sure that you don’t run into any legal issues.
Semanchik Law Group – Legal Advice and Assistance You Can Rely On
If you need a business attorney in San Diego to help you make sure that you do not accidentally pierce the corporate veil, you need look no further than the Semanchik Law Group. To set up a consultation and learn more about our legal services, just give us a call at (619) 535-1811. We can’t wait to help you and your business continue to thrive!