Putting the Limited in Limited Liability Company

Recently, I have been doing a lot of counseling related to small business formation and operation. My goal of this counseling is to ensure that the business owner is taking advantage of the liability protections the formation of a business entity provides. With the proper formation and operation of a company, whether it is a corporation, S-corporation, limited liability company, or a limited liability partnership, an individual can protect their personal assets from business debts. With the advent of the internet and state provided forms, it has become very easy to create one of these entities with the state. However, simply creating the entity is not enough to ensure that an owner's liability is limited.

At the very least, to limit liability, the company must operate like a separate business entity. Often, this requires the adoption of an operating agreement, a member control agreement, or a shareholder agreement, the opening of a separate business account, and the following of corporate formalities. Each one of the above listed entities presents its own challenges and benefits. If you live in Minnesota and currently own a company and need counseling on how to limit your liability or if you are thinking of starting a company, please contact Geiser Law, PLLC.