A single-member LLC owner explains four mistakes that destroy liability protection: no separate business bank account, mixing personal and business expenses, operating without an agreement, and keeping too little cash in the account. Add general liability insurance as backup.
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If you're the only owner of your LLC, then here are 4 mistakes that you want to avoid making. Also, at the end, I share something that you should strongly consider doing when operating your business. So the first mistake is not having a separate business bank account for the LLC. LLCs must have separate business bank accounts, otherwise you risk losing the liability protection. The second mistake is commingling personal expenses with business expenses. Doing that could risk piercing the veil of protection. The third mistake is not having a good operating agreement. If you don't have one, then the state's rules automatically apply to your LLC. The fourth is not keeping enough money in your business bank account. If you don't do that, then you might lose the personal liability protections. And finally, the last thing that you should strongly consider doing when owning a business is getting a general liability insurance policy. This will help protect your business assets if the business is ever sued, and if the business's veil of protection is ever pierced, then it may help protect your personal assets. Thanks, and follow me for more.