- Legal implications of a business decision: There are a variety of areas of law that may affect your business decisions, including: contracts, sales, negotiable instruments, creditors’ rights, e-commerce, product liability, torts, agency, business organization, professional liability and Courts and procedure. It is important to understand the impact of these laws on your business decisions to avoid liability.
- The corporate shield: A corporation is a legal entity created and recognized by state law. It can consist of one or more natural persons (called Shareholders) identified under a common name. A primary benefit of incorporating your business is to insulate yourself as an owner from personal liability arising out of the operation of your business.
- Bad business practices and “veil piercing”: Certain practices invite trouble, especially for the closely held corporation (one in which the shares are held by a single person or by only a few individuals): the co-mingling of corporate and personal funds, the failure to hold board of directors meetings and record the minutes or the shareholders continuous personal use of corporate property e.g. vehicles, or even under capitalization or insolvency. If the owners use a corporate entity to perpetrate a fraud, circumvent the law, or in some other way, pursue an illegitimate objective, a court may ignore the corporate structure by “piercing the corporate veil” – exposing the shareholders to personal liability.
The foregoing is general information only and does not constitute legal advice regarding your specific legal matter nor does it create an attorney-client relationship regarding your matter.
To schedule an appointment to discuss your business law case, please call (734) 475-4659.x