This article is provided courtesy of LLC.NET the LLC Specialist.

Incorporating your business is a safe way to protect not only your company but also your personal assets if events take a turn for the worse. However, different forms of incorporation provide different types and levels of protection.

Choosing the right one is imperative before you open your doors for business. LLC.NET provides some valuable and timely advice about this important step.

Filing as a limited liability company is only the beginning. You have to work to maintain this status if you want to enjoy its special protection.

Keep in mind that you and your company are two separate legal entities. You as a human being have a finite lifespan, but your company could well outlive you. It is vitally important to keep your identity separate from your business. Otherwise, your company retains a legal status akin to that of a minor child, leaving you liable for any of its debts and missteps.

You have to observe some specific formalities to maintain the company’s status:

* Elect a board manager or member
* Have a physical address where official documents can be sent
* Avoid commingling your personal assets with those of your business

Not following these guidelines creates a legal loophole that creditors can exploit if your company goes bankrupt. You risk losing your personal assets as a result. That is why we suggest to our clients that forming an LLC is the best option for them in most cases.

Providing proof of the actions of a corporate board and officers is a relatively straightforward matter. Hold regular meetings and make sure the proceedings are documented in written minutes. This proves they are operating under corporate authority.

Of course, this doesn’t mean that board meetings need to be held for regularly occurring everyday purchases. For example, it would be ludicrous to call a board meeting when you need to buy office supplies.

Instead, board meetings are called when significant one-time acquisitions are being made. An example would be approving the launch of a large advertising campaign costing several thousands of dollars. This is an expense that lies outside the day-to-day business of a company making widgets or acting as a sports agent.

Other examples of extraordinary items include:

* Leasing or subletting the corporation’s premises

* Contracting out a large project costing unusually large amounts of money

* Acquiring corporate financing in the form of loans and lines of credit

* Establishing corporate bank accounts and who is permitted to sign checks

* Entering into joint ventures with one or more outside companies

* Changing the structure of the corporation in a significant way through mergers, acquisitions or reorganizations

* Offering employee benefits

Taking and maintaining detailed corporate minutes may seem like a pastime guaranteed to cure your insomnia. In reality, they are a permanent record of what really was said and what happened during a meeting that resulted in an ill-advised joint project with another company. They are also a record of your company’s growth and change over the years, a trail of breadcrumbs from one decision to a subsequent one.

LLC.NET recommends their service that can easily guide you through the process of selecting the right kind of business filing and the most advantageous time to file.