Protecting Your Personal Assets
On behalf of Grand Rapids Litigation Attorneys Blog posted in Business on Thursday, March 15, 2012
Creating a corporate entity or limited liability company is simple. Any one can do it. The real issue arises in doing it correctly and maintaining the business as a separate and distinct entity from the individual owners.
Everyone has seen the commercials and ads for online document preparation services. They offer to help you prepare your corporate documents for a low fee and often state that it could save you hundreds of dollars compared to hiring an attorney. While it might cost more to hire a lawyer to help set up your company, the lawyer can help save you thousands of dollars in personal liability. This can save your house, your vehicle, your future pay as well as your retirement.
In the recent Michigan Court of Appeals case, Florence Cement Co. v. Vettriano, Docket Number 295090, three business owners found out this lesson the hard way. The Court of Appeals ruled that the business they owned was a mere instrumentality of them to commit a wrong and the plaintiff was harmed because of this. Therefore, they were personally liable. It would appear that this could have been avoided but these individuals only formed the business and then failed to take the necessary steps to treat the business as its own entity. If they had an attorney assist them all the formalities of ensuring the business was separate and distinct from them would have been followed.
Forming a limited liability company or corporation is more then filing a form with the State of Michigan. There are other documents that need to be executed and followed to ensure there is no doubt that the business is a newly formed entity. These are documents that online document providers fail to provide, are not tailored to your specific situation and/or not kept up to date or supplemented properly. An experienced business attorney can provide you with this support so that you do not suffer the same fate.
