I just finished a legal seminar with some LLC updates.
nce Emphasizes Direct Attack On LLCs
The last year or so, we have observed a growing number of conferences discussing how to get past an LLC to collect from the owners or members personally. Trends that you see in the continuing education for attorneys can give you insight into what to expect in the future. For one thing, it means that the idea of piercing through the LLC is fresh on the minds of the attorneys who attended. It also means that any new strategies are ready to be tested by their law firms.
The focus of the conference was on how to set aside an LLC to get to the personal assets of the owners. The seminar helped meet some of the continuing education requirements that lawyers have to fulfill to keep their license to practice law. You never stop learning and it’s critical to stay abreast of the latest developments and trends in legal matters!
There are trends in legal circles just like your occupation. Attorneys go to conferences to keep up with changes in the law as well as to see what other lawyers are doing. Success comes not in everything that you know as an
Piercing The Veil To Get To Your Personal Assets
The conference was taught by three separate attorneys, each with experience in litigation against LLCs. In fact, the conference was titled “Piercing the LLC Veil”. Although some of the comments dealt with corporations, the real meat of the class was aimed at LLCs. The speakers emphasized that when the LLC isn’t run and operated as it should be that convincing a judge to let you collect from the family assets of the owner really doesn’t take a whole lot of effort. Don’t get us wrong, it still takes evidence and a hearing. The takeaway was that without too much extra effort, an attorney can pierce the protective armor of a weak LLC.
If you’re a hungry plaintiff attorney in search of your next fee, you have to be aggressive. When the other side’s lawyer works for a percentage of what’s collected, your personal assets can’t really be ignored. A lawyer that’s getting part of the money he recovers can’t afford to leave money on the table.
Is Your LLC At Risk?
Why’s this important to an LLC and its members? Because if your LLC ends up in a lawsuit, then the focus may turn from getting money out of the company to looking at your family’s bank account and property. Every lawyer knows that LLCs are used to separate the business liabilities from your personal property. Lawyers are figuring out that LLCs are operated by people.
You guessed it; people make mistakes in all kinds of ways. Some entrepreneurs go the do-it-yourself route when the LLC is formed. Since they aren’t trained lawyers, the details like dotting the “I” and crossing the “T” are overlooked. It is a weakness that the attorney can exploit.
Some LLCs are not aware that there are rules governing operations. Without meaning to break the rules, they do so. You have surely heard that ignorance of the law is no excuse. Thus, another point of attack for the lawyer looking for ways around the LLC to the deeper pockets.
Don’t Get Too Busy To Care For Your LLC
LLC managers and members that already know the rules get busy. The business is going well! The “customer comes first” mentality settles into the process and the LLC maintenance slips into the background. Sure, the LLC members know the LLC should be given attention and it’s on the task list to be done. But, something always seems to interfere and get in the way. The lack of follow-through becomes another chink in the protective shield that gives the opportunity for penetration by a seasoned attorney.
Check Ups & Maintenance
Your LLC requires upkeep like the company truck. The oil needs changed and the tires need the pressure checked. If you postpone taking care of the truck for too long, then something is going to break. Maybe your experience has been different than ours, but vehicles never seem to break down when it’s convenient. It’s always out of town and late at night in the pouring rain!
How about your LLC? Have you been giving it the attention you should? If not, now’s the time to do it! Take a look at our periodic LLC check-up plans designed to help keep your LLC tuned up and ready to go. We have flat fee plans to fit any budget right down to the smallest business.