Having a Limited Liability Shield Is Your Business’ First Line of Defense
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What do you worry about? As business owners, we worry about a lot of things. Some of those things we can control, and some of them we can’t control. Today, I want to talk to you about something you can control, and I know you’re worrying about it. It’s that liability shield. That liability shield in your business that protects you personally from being responsible for your business’s debts and obligations.
When we all set up our own business entity, an LLC, Corporation, whatever it is, I know we were doing a lot of things all at one time. We all go through it. So at some point, you stop and you wonder “Did I do it right?”, “Did I set this up correctly?”, and “Is it protecting me the way I want it to protect me?” And so when we do a legal audit, those are the worries that we’re addressing. We’re going through the setup, we’re going through the maintenance and the management of of a business entity to make sure that it was governed correctly.
So today, I want to tell you about a couple of clients we’ve had (anonymously of course) and explain why they came to us what their situation was and what the audit did for them.
The first one I want to tell you about is someone who had the desire to become a certified woman owned business. She was filling out the applications to become certified and realized that she did not have the documents that they were asking for. So she came to us asking for those documents, and in the process, we discovered that she was missing those documents but also missing many other things. So we did an audit on her business entity, it was an LLC, and we put those things in place, and in that process created all of the documents that she needed to submit on her certification application. So that was a nice little perk. We got to shore up her structure and she got everything she needed for her certification application.
The next one I want to tell you about is actually a combination of two different clients and they both came to us for the same reason, they were getting ready to sell their business. One client was at the retirement age and wanted to pass on something he had spent his lifetime building. The other client had built the business and was ready to sell and move on to some other type of venture. Both of them realized that in selling the business, they were worried that they would be personally liable for the business after the sale. So we talked about what structure they had in place, what their foundation looked like, and was their liability shield nice and healthy. We realized that an audit was needed because, number one, in order to complete the sale we needed some of those documents, and number two, we really wanted to make sure that they were protected personally before the sale so that after the sale, everything went as it should. So that audit served to create comfort for them knowing that after the sale they would be protected, and it got us through the sale with the documents we needed.
The third client I want to tell you about is a client that was expanding, and this client is not a doctor but in the health care business, and they were expanding into different states. She was worried that she was going to have liability because the bigger she got, the more people she helped, the more liability she was going to incur. So she was falling asleep at night worrying about whether she was going to be in trouble, something bad was going to happen, her house was going to come crashing down around her kind of doomsday scenarios. And so doing an audit for her created this comfort and security knowing that she could expand, and the foundation of her business was healthy and stable to support that expansion.
So you can see there’s all kinds of different reasons why people decide or realize that they need an audit of their business entity. And there’s no judgment on our part when you come to us and we go through what’s needed. Were not chastising you for forgetting something, missing something, or skipping something. Everybody skips steps at some point in time. It’s just a matter of, are you going to stop and go back and plug those holes and make sure they get done at some point?
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