Five mistakes that kill LLC protection: mixing personal and business money, skipping formalities like operating agreements, not keeping three to four months of cash reserves, going without liability and umbrella insurance, and electing S-corp status before you're profitable.
If I were creating an LLC, here are 5 things I would never do. Thing 1: Mixing personal and business accounts. Business expenses have to come from the business account and personal from the personal account. If you blur the line between those 2 accounts, you may lose your LLC protection. Thing 2: Not following LLC formalities. You have to have an operating agreement. Must have minutes that reflect the major decisions of the business. Thing 3: Not keeping enough money in the business account. You should have 3 to 4 months of operating expenses in your account at all times. Thing 4, not having adequate insurance. You need an underlying liability policy and an umbrella coverage policy. Thing 5 is electing S-corp status too soon. You need to be making a decent amount of profit before you elect that S-corp status. Check with your accountant. Why do you need my newsletter? Click on my link on my profile page and sign up.
comment workshop.free still need plan to keep people out of court. learn how to in less than an hour
