Hi,
I have an LLC company that spin-off from the university. The equity holders are me and the university. I am basically running the company (although the university owns small equity, less than 10%). I was reading that one of the reasons why the courts can go beyond your personal assets is that you do not follow the formalities of the company (e.g., recording meetings..). But if I am the only one running the company, is it possible that the "piercing the corporate veil" applies to this case and I lose my personal assets if someone sues me ?
Thanks.
Disclaimer: I am not a corporate lawyer, I do however own LLCs and C Corp as well as have degrees in business.
The nature of an LLC is specifically to protect the small business owner by encouraging individuals to launch a business without fret of losing it all due to an unhappy customer or freak accident. With that said they are very strict with how this structure is ran and requires you to be extremely diligent with every dime spent and earned. You are protected as long as you follow their rules. One thing I've seen done is own an LLC that holds other LLCs... This is something the upper middle class or lower upper class does often and helps protect investments and personal assets a lot more. I recommend talking to a lawyer - in my experience most lawyers are happy to spend an hour or two discussing possibilities if it means them more business. Best of luck!
This is a complicated legal question that if you are in need of advice, you should contact a lawyer within your state. However, I'll answer broadly that: different states treat this differently. What you could research further is the "charging order protection" that your state allows (or doesn't allow. States that have pro business laws like Wyoming and Delaware have this protection. Some notable states that do not provide this protection for single member LLC's notably are Florida and California. So look up your state laws or talk to a lawyer to know for sure.
