Imagine you have just been served with a lawsuit concerning a business issue and you find that you have been named personally in the lawsuit. Why were you sued when your company performed the work? After all, you formed a corporation to protect your personal assets. Unfortunately, if you fail to operate your company properly, a plaintiff can “pierce the corporate veil.” This means you may be personally responsible for the acts of your company. Now your house, your savings, and your future are at risk.
Now is a great time to review your corporate records to ensure that your business is legally up to date. Corporate paperwork, while sometimes time consuming to maintain and compile, is essential to the proper operation of your business. The records you keep will often protect you in the event that you are ever involved in a lawsuit. Paperwork often seems like an aggravating little detail that can always be put off, but the lack of properly maintained corporate records can be a potential disaster for your business and your personal financial assets. There are three items you should review in order to protect yourself.