Many business owners choose to incorporate their business to avoid personal liability for the debts and liabilities of the business. When done properly, the business is a separate and distinct entity from its owners. However, if the owners are not careful with certain corporate formalities and fail to adequately capitalize the company, a third party may be able to “pierce the corporate veil,” which would shatter the protection of the corporate structure. To the extent…
Read More
Managing risk should be a key focus for all businesses. One important strategy that companies can use to protect themselves is to implement effective indemnification provisions. Such provisions can be instrumental in easing the financial burden of a lawsuit against your company. Rather, you can obligate your business partners to pay for the legal costs. Before you enter into any business contracts, you should consult with an experienced startup attorney in Los Angeles to draft…
Read More
Generally, a business owner cannot be held personally liable for the liabilities of his or her business if the business is a corporation or limited liability company. However, there are situations in which courts will hold an owner personally liable. The below list, while not complete, highlights the seven most common causes of personal liability. Bank Loans New business owners are typically required to provide to personal guarantee for bank loans. To the extent the…
Read More
Expanding and hiring more employees is a mark of business success in the corporate world. However, companies should realize with growth comes the increase for liability exposure in different areas. Companies need to remember that they will be held liable for the conduct of their employees; hence, they should be aware of their liability exposure and ways to minimize the risks. An experienced corporate lawyer in Los Angeles can help create strategies to combat liability…
Read More
