One of the reasons business owners go through the legal formalities to incorporate their enterprise is to avoid risking personal liability for the debts of the business. If a court chooses to pierce the corporate veil, the owners of the business lose all of these protections. Fortunately, the courts in Florida are reluctant to take the drastic step of piercing the corporate veil. But it does happen. There are several principles business owners should follow to prevent a court from having any reason to consider piercing the veil. Appearances Matter One of the first principles that business owners trying to protect their personal assets need to understand is that in the legal system, appearances do matter. The more suspicious any business activity appears the more
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When you’re opening a new business, one concept you may run across is “piercing the corporate veil.” But, what is a corporate veil? And, what does it mean to pierce it? One of the most significant advantages of creating a corporation or limited liability company (LLC) is to limit your liability, shield your personal assets from your business liabilities. That shield is known as the “corporate veil.” Piercing the corporate veil means that something happened to cause you to lose this shield, and comes up most often during business litigation. What Is The Corporate Veil? The corporate veil is a legal concept. It is a kind of legal wall that separates your personal assets and liabilities from your business assets and liabilities. It is One
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The threat of litigation is a fact of life for small business owners. Even when taking every possible step to do the right thing there is always a chance that the unforeseeable happens and your business finds itself embroiled in a lawsuit. While some industries face higher litigation risks than others, every small business has liabilities that could make them vulnerable. You owe it to yourself and your hard work to protect both your company and your personal assets. There are steps you can take to protect yourself before you are placed in a vulnerable position. 6 Straightforward Steps To Mitigate the Risk of a Lawsuit Even the most risk averse amongst us can find ourselves in tricky legal waters when operating a business. But,
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