When you incorporate a business you are separating yourself
form your business. You are creating a separate legal entity.
You must be very careful in how you present your corporation.
If you do not act in a corporate capacity at all times then
you may risk what is called “piercing the corporate
veil” wherein a court may impose personal liability
on shareholders, officers and/or directors for corporate
acts. You may also make it easier for a creditor to claim
liability against you personally and not your corporation
or LLC.
By simply documenting all corporate activity, you will
save yourself from possible personal liability in the future.
Creating meeting minutes, signing corporate documents correctly
and presenting your company as a corporation or LLC in its
letterhead, business cards, and websites are all requirements
when acting in a corporate capacity.
After your corporation or LLC is filed and of active status
you must follow these steps in order to remain in compliance
with your state’s corporate requirements:
• You
must hold an organizational meeting to complete the organization
of the corporation by appointing its officers such as President,
Vice President, Secretary and Treasurer.
• Also
in the organizational meeting you must adopt the corporations
bylaws which are the rules and standards that govern the
operation of a corporation. You must also issue shares of
stock which represent ownership in a corporation. To ensure
that organization is completed correctly, we suggest you
consider purchasing our "Corporate Kit". Each
of our kits come with your corporation's name imprinted
in gold on the binder. Our Corporate Kit also comes with
a Seal Embosser with your company's name and year of formation,
sample bylaws and minutes and 20 security stock certificates.
• In most states you are required to file an "annual
report" with the Secretary of State. An annual report
is usually an informational filing that lists such things
as addresses, officer information as well as registered
agent information. Also, the annual statement is usually
accompanied by a filing fee. To see the corporate requirements
for your state, click here.
Forms for the annual report are available from at the Secretary
of State's office and website.
• Avoid "commingling", which is the sharing
of personal and corporate assets. The most common instance
of commingling is using one bank account for personal and
corporate purposes.
By following these simple rules and directions, "piercing
the corporate veil" will be one less thing that you
will have to worry about during the life of your corporation.
