9 ms·

Form an LLC. Not quite a corporation, but accomplishes what you are looking for. http://guides.wsj.com/small-business/starting-a-business/how-to-start-an-llc/ h

by klunger 11y ago

Form an LLC. Not quite a corporation, but accomplishes what you are looking for. http://guides.wsj.com/small-business/starting-a-business/how-to-start-an-llc/ http://guides.wsj.com/small-business/starting-a-business/how...

jt2190 11y ago
The liability protection of an LLC only covers legitimate business activity. As soon as you've mixed your personal activity with that of the business you've "pierced the [thin] veil" between you and your business, and your personal assets are no longer protected.
- jrs235 11y ago
  Not only this but most single member LLCs will require personal liability or co-signer [usually from the single member] for any loans or debt. So if the LLC doesn't pay, the single member will have be liable.
  - jt2190 11y ago
    Er, what? The LLC doesn't require personal liability... That would kind of defeat the whole purpose! Perhaps you mean that sometimes those extending loans to single-member LLCs require that the member co-sign the loan? (edit: I'd walk away from that loan, given the issue of piercing the veil I mentioned in my previous post.)
    - jrs235 11y ago
      No if I were to try to get a loan or credit card (a.k.a. a line of credit) for my LLC (which has basically zero assets), the bank or credit card company would require me, personally [edit: or someone else with assets], to cosign. "Perhaps you mean that sometimes those extending loans to single-member LLCs require that the member co-sign the loan?" Yes. As long of the funds from the loan are used strictly for LLC business purchases and purposes one should be able to keep the corporate veil in place. Even if the LLC defaults on the loan/debt the creditor doesn't need to pierce a corporate veil to go after your personal assets to repay the loan... they have your personal liability signature. Your corporate veil would/should still be in place for any other transactions that the LLC is a party to.
      - jt2190 11y ago
        > ... if I were to try to get a loan or credit card > (a.k.a. a line of credit) for my LLC... Exactly. The LLC itself does not require taking on personal liability. Your phrasing: > ... but most single member LLCs will require > personal liability. ... is why I was confused.

by klunger 11y ago

jt2190 11y ago

The liability protection of an LLC only covers legitimate business activity. As soon as you've mixed your personal activity with that of the business you've "pierced the [thin] veil" between you and your business, and your personal assets are no longer protected.

jrs235 11y ago
Not only this but most single member LLCs will require personal liability or co-signer [usually from the single member] for any loans or debt. So if the LLC doesn't pay, the single member will have be liable.
- jt2190 11y ago
  Er, what? The LLC doesn't require personal liability... That would kind of defeat the whole purpose! Perhaps you mean that sometimes those extending loans to single-member LLCs require that the member co-sign the loan? (edit: I'd walk away from that loan, given the issue of piercing the veil I mentioned in my previous post.)
  - jrs235 11y ago
    No if I were to try to get a loan or credit card (a.k.a. a line of credit) for my LLC (which has basically zero assets), the bank or credit card company would require me, personally [edit: or someone else with assets], to cosign. "Perhaps you mean that sometimes those extending loans to single-member LLCs require that the member co-sign the loan?" Yes. As long of the funds from the loan are used strictly for LLC business purchases and purposes one should be able to keep the corporate veil in place. Even if the LLC defaults on the loan/debt the creditor doesn't need to pierce a corporate veil to go after your personal assets to repay the loan... they have your personal liability signature. Your corporate veil would/should still be in place for any other transactions that the LLC is a party to.
    - jt2190 11y ago
      > ... if I were to try to get a loan or credit card > (a.k.a. a line of credit) for my LLC... Exactly. The LLC itself does not require taking on personal liability. Your phrasing: > ... but most single member LLCs will require > personal liability. ... is why I was confused.