Protecting Your Personal Assets

You've decided to take the plunge and start your own business. You've formed an entity -- maybe its a corporation or a limited liability company -- you paid your fee at the Secretary of State's office and filed your papers. Now what? If you believe that this is all you have to do and you are protected from individual liability if your company gets sued, you are sorely mistaken.

If only it were that simple. Any type of entity, corporation, limited liability company, limited liability partnership or any other entity requires upkeep, maintenance, and attention to protect an individual from being liable. However, it is important to remember that maintaining corporate formalities does not provide absolute immunity from liability. Corporate officers are still responsible for their own torts. No corporate status will protect an officer or director who makes a misrepresentation to a third party.

The next few posts will focus on how to make sure that you, as an officer or director of a company minimize your personal exposure should your company get sued.