Page 2 of 2 FirstFirst 12
Results 11 to 16 of 16

Thread: Getting an Illinois Tax Id and EIN before getting an LLC?

  1. #11
    Registered User
    Array
    Freelancier's Avatar

    Join Date
    Sep 2012
    Location
    Georgia
    Posts
    2,113

    Default

    the protection is very easily rendered null during the every day course of running your business.
    Only if you operate your business as your personal piggy bank. If you run it as an entity separate from your personal life, it's much harder to screw this up.
    Low-Cost Total Compensation Statements - No minimums, no setup costs.
    Going to Disney World for Vacation? Rent One Of Our Vacation Homes

  2. #12
    Registered User
    Array
    Join Date
    Jan 2009
    Location
    USA
    Posts
    38

    Default

    Quote Originally Posted by Freelancier View Post
    Only if you operate your business as your personal piggy bank. If you run it as an entity separate from your personal life, it's much harder to screw this up.
    No. That is not what I was referring to at all. I owned a franchise and have owned other businesses. On my first attorney visit before buying the franchise it was explained to me that "piercing the veil" of protection is done easily and routinely and business owners don't even realize it. Every supply/equipment vendor, bank, credit card merchant processor, landlord, etc, will require you sign a personal guarantee or they won't do business with you. And that basically negates the "protection".
    Sylvia
    http://businessplanmentor.com/
    Free business plan tutorial and step by step how to start your own business.

  3. #13
    Registered User
    Array
    Freelancier's Avatar

    Join Date
    Sep 2012
    Location
    Georgia
    Posts
    2,113

    Default

    Every supply/equipment vendor, bank, credit card merchant processor, landlord, etc, will require you sign a personal guarantee or they won't do business with you. And that basically negates the "protection".
    I'm thinking you got bad advice from your attorney... or -- more likely -- you misunderstood him telling you that those credit agreements that you might have to personally guarantee are not covered under the corporate protections when the corporation goes bankrupt (since you signed them personally). It doesn't invalidate the corporate fiction, but it outlives the corporate fiction.

    How to Avoid Piercing the Corporate Veil | BizFilings and Piercing the Corporate Shield: How To Do It: How To Avoid It | Stimmel Stimmel and Smith

    Of course, IANAL and I highly recommend visiting with one before you start your business to make sure you're getting the right information.
    Low-Cost Total Compensation Statements - No minimums, no setup costs.
    Going to Disney World for Vacation? Rent One Of Our Vacation Homes

  4. #14
    Registered User
    Array
    Join Date
    Jan 2009
    Location
    USA
    Posts
    38

    Default

    Quote Originally Posted by Freelancier View Post
    I'm thinking you got bad advice from your attorney... or -- more likely -- you misunderstood him telling you that those credit agreements that you might have to personally guarantee are not covered under the corporate protections when the corporation goes bankrupt (since you signed them personally). It doesn't invalidate the corporate fiction, but it outlives the corporate fiction.

    How to Avoid Piercing the Corporate Veil | BizFilings and Piercing the Corporate Shield: How To Do It: How To Avoid It | Stimmel Stimmel and Smith
    .
    "This protection is not guaranteed however." From the first link. My attorney specializes in small business startups. He knows what he's talking about. I've seen and heard the same advice about personal guarantees countless times.
    Sylvia
    http://businessplanmentor.com/
    Free business plan tutorial and step by step how to start your own business.

  5. #15
    Registered User
    Array
    Freelancier's Avatar

    Join Date
    Sep 2012
    Location
    Georgia
    Posts
    2,113

    Default

    If you have to take exactly one sentence out of context in a long article that explains the responsibilities that come with maintaining the corporate veil to prove your point... well, you don't have a point. Better that you encourage everyone to read the articles and talk with their attorneys instead of trying to insist that what you heard from your attorney is going to be true for everyone.
    Low-Cost Total Compensation Statements - No minimums, no setup costs.
    Going to Disney World for Vacation? Rent One Of Our Vacation Homes

  6. #16
    Registered User
    Array
    Join Date
    Jan 2009
    Location
    USA
    Posts
    38

    Default

    Quote Originally Posted by Freelancier View Post
    If you have to take exactly one sentence out of context in a long article that explains the responsibilities that come with maintaining the corporate veil to prove your point... well, you don't have a point. Better that you encourage everyone to read the articles and talk with their attorneys instead of trying to insist that what you heard from your attorney is going to be true for everyone.
    I read the entire article and it didn't cover the topic I was referring to. But it did say, as I say, the LLC is not a guaranteed protection of your personal assets as most believe. And if I didn't already explicitly spell it out...everyone should seek advice from an attorney before deciding on their business structure. Don't rely on forum advice or on what everybody else is doing (jumping on the LLC bandwagon for the wrong reasons). End of discussion (on my end).
    Sylvia
    http://businessplanmentor.com/
    Free business plan tutorial and step by step how to start your own business.

Bookmarks

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •