Yes, legalese is its own language. Like the Latin spoken at the Vatican, it’s truly understood only by a few.
So for the rest of us, here’s a handy definition of a term relevant to all business owners (whether a corporation or an LLC):
It’s considered a privilege to be able to do business in a way that creditors can’t get to your personal assets. But some business owners abuse the privilege. In those situations, a court will let a creditor ignore the fact that you’ve formed a corporation (or an LLC)–the “corporate veil”–and hold you personally responsible for the debts you’ve accumulated.
Are you treating the business like your own personal slush fund, paying out personal expenses through the business? That’s a problem. Have you failed to comply with corporate paperwork and the niceties of annual minutes? That’s another strike against you. For more on this, go to my site, WiseCounselPress.com, and check out the article “The Simple But Powerful Reasons for Corporate Minutes.”
This entry was posted on Tuesday, September 9th, 2008 at 11:18 am and is filed under Corporate, Legalese. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.Leave a Reply
