Business checklist to avoid “alter ego” issues and protect your assets

The following checklist will determine if you have taken the necessary steps to protect your corporate veil.

Piercing the corporate veil is a legal concept through which a company´shareholders can be held liable for the actions of the corporation.

BUSINESS CHECKLIST

1. Was your Corporation properly capitalized?
2. Do you have a written Operating Agreement?

3. Have you signed the Acceptance of Appointment as a director?

4. Have you properly filled out or disposed of the Resolution, which elects and appoints
additional Directors of you corporaton?

5. How many Shareholders to you have?

6. Have the additional Directors appointed by you signed an Acceptance of Appointment
as Director?

7. Do you hold annual Board of Director Meetings?

8. Do you have proper and adequate minutes for the meetings of the Board of Directors of
your Corporation?

9. Do you own more than one business?

10. Have the Directors of you Corporation
elected Officers?

11. Have By-Laws for your Corporation been adopted by your Corporation´s Board of
Shareholders?

12. Has the Board of Directors of your Corporation authorized the issuance of
the Company´ stock?

13. Have you ever paid business expenses with personal funds?
14. Do you fully understand your Corporation´s By-Laws?

15. Do they reflect the current business you are doing?

16. Has the issued stock been recorded properly in the Stock Ledger?

17. Has the appointed Officers of your Corporation accepted their appointments?

18. Has the Corporation secured a Federal Tax ID number?

19. Have you filed all necessary filings in any state that your company is legally doing business in?
20. If your Corporation is near or over a year old, have you had an annual meeting of your
shareholders?
21. Have you documented all bank loans to the
company?
22. Have you documented all personal loans?
23. Do you file an annual tax return for the company?
24. If your Corporation is near or over a year old,
have you had an annual meeting of your board of
Directors?
25. Have you been sure to use a Corporate Resolution of the Board of Directors to authorize and
document all major corporate acts?
26. Have you been sure to keep separate books and bank accounts for the Corporation and yourself, making sure at all times never to commingle any funds?
Opening a bank account?
Authorizing employee benefits?
Authorizing employee agreement?
27. Are you sure that your tax returns, books of account, and Corporation Record Book all
conform to one another?
28. Are you sure that you have properly documented all transactions between you and
the Corporation, with resolutions, minutes, etc.?
29. Have you executed every document that you have executed on behalf of the Corporation as
its Officer, to guard against personal liability?
30. Have you read and do you fully understand your Articles of Incorporation?

31. Do you now how your LLC is taxed?

If you answered No to any of the questions, it is important that you take the steps now to catch-up your corporate records and secure your corporate veil.

Failure to maintain and document corporate decisions, in essence ignoring your corporate existence, can result in you being held personally liable for the company´s debts.