The frantic call comes into the office, “I just bought a new business and I need an LLC fast!” Business opportunities spring up suddenly and seemingly out of nowhere at times. Although it’s not every day, we have clients wanting
You may be wondering why we would mention a “competitor” by name on our website. Well, it’s because we don’t consider Legal Zoom a “competitor”. Companies that sell legal forms are not law firms, therefore they really aren’t providing legal services. They’re just selling forms. We provide legal advice and legal representation. So bringing up a do-it-yourself or DIY alternative just helps folks better understand what they’re getting for their money.
The phone calls for ZOOM or
Getting an LLC in an hour or less really needs a little explanation and clarification. As a practical matter, you aren’t going to have an LLC in an hour. Although it’s technically possible to get one that fast, the notion of an LLC in an hour or less is generally a marketing ploy. If you understand that an LLC is a whole lot more than the certificate the Secretary of State processes with the filing fee, then it helps you see what we’re talking about.
In setting up an LLC, one of the primary steps
An LLC is a business structure the law allows
In order to have an LLC, there are many, many other things that have to take place. The certificate is just the first step in the journey. But, once the certificate is obtained, then an LLC appears to have legally zoomed into being. The business owner can complete the pressing business deal and fill in the gaps in the LLC in a day or so.
While this last-minute approach for your LLC is not considered best practice, it is a fact of life. In zoom legal work, it’s still essential to finish up the work to complete your LLC! Otherwise, you run the serious risk that your LLC won’t hold up in court.
There’s a growing trend in the legal community to challenge LLCs. Attorneys are asking the courts to declare that an LLC isn’t legitimate. The lawyer term is called “piercing the veil”. Some attorneys refer to it as “piercing the corporate veil” or “piercing the LLC veil”. It all amounts to the same basic legal procedure. It’s a direct attack against the LLC to have the shield of protection removed. If successful, the attorney gains access to collect your personal assets.
Attorneys tend to follow the money!
If your LLC doesn’t have the funds, then “you” are the most likely source of real money. Let’s face it, the typical entrepreneur or business owner has more, financially
If you have set up an LLC in a more or less hurried manner, you should take the time to review what was done. If there are any gaps in the LLC setup or if you haven’t maintained the LLC as well as you should, then it’s time to fix things. Don’t put it off! In piercing the veil, the court is going to look at what you did (not what you raced around and corrected after you were sued). The idea that “I’ll fix later if I have to” will bite you big time!
LLC Check-Ups Are Important!
One of the reasons we have LLC Check-Ups is because we began to notice a lot of clients not maintaining their LLCs. We were observing an increasing number of people who had LLCs that wouldn’t hold up in court. The more we thought about it, the more troubling it became. Why even bother forming an LLC if you aren’t going to operate up to the required legal standards? It’s crazy!
You built the business with the proverbial blood, sweat, and tears. You may have plans to pass the business to the next generation because your kids grew up in the business. The pride in your company shows in each and every minor detail from the company logo right down to the way the telephone is answered. You’re a success!
But, if your LLC is “pierced” and the judge determines it isn’t valid, those personal assets are fully in the crosshairs. The very funds that you would need in retirement or start up again in a new LLC are part of full-fledged litigation. Everything is now on the line because the details were forgotten long ago. The LLC was formed in a hurry, then the day to day business activities began. The significant aspect of the LLC entity was out of sight and out of mind.
Word to the wise. If you zip into a new business, be sure to finish the legal formalities and comply with the requirements imposed by the law. You want the full protection of the LLC on the chance that litigation lightning strikes.