Now, more than ever, business owners should ensure that the documentation and other legal mandates of corporations and limited liability companies are met. The failure to do so could jeopardize the business ability to stay personally clear of the debt obligation. Nevada state law requires each corporation and limited liability company to keep annual corporate minutes and to conduct annual meetings. More importantly, and more often the problem, is that small business sometimes co-mingle business funds with personal funds, a certain step in giving a creditor a good claim to pursue you personally for a business debt.
The failure to maintain proper records and to properly account for and separate business finances could pierce the veil of protection provided by legally recognized entities. However, documentation and finances are not the only concern. Business owners who have closed the doors should also be careful to file the certificates and other documentation required by Nevada state statutes. Regardless of whether or not personal liability for a business debt was incurred at the inception of the debt, failure to file proper documentation and keep separate accounts may leave business owners liable for business debts that they would have otherwise been shielded from.
Tisha Black-Chernine, Esq.
