So you filed the state requirements to start your own company. Therefore, now you have obtained limited liability and can shield yourself personally from any obligations that may transpire in the course of your business. Wrong! In fact, filing with the state is merely the first step to obtain limited liability.
You may be asking yourself, so how can I maintain the full protections of limited liability? Well, achieving the full protections of limited liability require your company to 1) follow the corporate formalities, 2) preserve the separate identity of your company, and 3) not engage in illegal or illicit behavior.
Complying with corporate formalities include 1) paying the initial fee to the Florida Secretary of State, and then filing an annual report with the appropriate fee every year. In addition, the board of directors, at the very least, must hold an annual meeting. The minutes from the meeting should be recorded and kept inside the company book. Moreover, the company should adopt an operating agreement or bylaws, which will depend on whether your company is an LLC or a Corporation, and these should also be kept inside the company book.
To preserve the separate identity of your company, you need to treat your company as a separate entity. In other words, your company must maintain separate bank accounts, and pay its bills out of separate accounts (separate from you and from your other companies). Also, your company should keep accounting and bookkeeping records and pay your taxes on time.
It is important that your business does not engage in illegal or illicit behavior. For the obvious reasons, if your company is used for the purpose of breaking the law or committing fraud, it is unlikely that your company will be able to maintain the protections of limited liability.
If you have any questions about maintaining the full protections of limited liability for your company, give us a call. We can help ensure that if you are ever sued, your personal life and/or your other businesses will not be at risk. Consulting with an experienced attorney in the complex area of business law is important for your business. We are located in beautiful Coral Gables and can be reached by calling (786) 837-6787 or by emailing us to schedule a consultation with you.