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What is “Protecting the Corporate Veil” and Why Is That Important?

Protecting the corporate veil is a critical business concept.  One of the primary reasons for having an LLC, C-Corporation or S-Corporation is to provide liability protection to you and others in the business. Many businesses evidently download forms from some site, fill them in, register with the State of California and the IRS and they are “in business”. The corporate structure exists to protect you as the owner(s) from personal liabilities, and to preserve your personal home and assets and keep them separate from the business. When a creditor is pursuing company, the first thing they will ask to see are your corporate documents. Their primary goal is to “pierce the corporate veil”. Many forms of corporate entities require specific regular actions such as a meeting of the stakeholders with recorded minutes. You want to make sure that you do not “co-mingle” your business assets with your personal assets. There are other strategies to ensure that you maintain the protections of the “corporate veil” to safeguard your personal assets. You’ve worked so hard to start and build your company. It’s just as important to make sure you seek the advice of experienced business attorneys who can help you to protect them.