From the Desk of Lauran L. Stevenson
Corporate Formalities Matter for LLCs
There is a lot of misconception regarding Limited Liability Companies (“LLCs”). One of the most dangerous misconceptions is that all you need to do is file a piece of paper with the state and you have a valid effective LLC. When the truth is, that is about 25% of the process to get to a valid and effective LLC. You must maintain the entity as its own separate and distinct entity or there will be no protection whatsoever.
Frequently members of an LLC will wonder why we insist on maintaining the same level of corporate formalities as you would for a Corporation. The answer is simple, there is no reason to gamble with limited liability. If the need arose to ever raise your limited liability shield, you wouldn’t want to rely on what isn’t required of your entity but instead show you have maintained the typical entity standards and therefore entitled to the full force of the limited liability protection.