“I’m protected, I have a LLC.” I’ve heard it a thousand times. As a lawyer, it frustrates me to no end. I don’t want to burst anyone’s bubble, but filing a LLC, alone, does nothing to protect anyone from anything.
Why is that? The idea behind a limited liability company is that is a separate and distinct entity. What does this mean? It needs to operate that way behind the scenes as well. Meaning… it needs its own bank account, space to operate from, corporate governance, etc.
While some of these expenditures aren’t absolutely crucial to gain the protections of the LLC, some of them are. It isn’t difficult for an experienced litigator to pierce a corporate veil. If you are running a small business, talk to your lawyer, make sure you are operating as you should to enjoy the full protections your LLC filing affords you.