Hi, I'm Attorney Elizabeth Potts Weinstein. Today, I'll discuss the top five mistakes people make when setting up their LLCs, particularly small businesses with one or just a few owners. Understanding these common pitfalls is crucial to maintaining the liability protection an LLC offers. What is an LLC? A Limited Liability Company (LLC) is a legal structure for a business. While you could also form a corporation, partnership, or sole proprietorship, an LLC is often preferred for its simplicity and benefits, such as limited liability protection. This protection shields your personal assets if the business is sued, can't pay its debts, or goes bankrupt. However, several common mistakes can jeopardize this protection. 1. Not Having a Written Operating Agreement An operating agreement outlines how the LLC will function, similar to a partnership agreement. Although not legally required in most states, having one is crucial, even for single-owner LLCs. This document h
Hi, I'm Attorney Elizabeth Potts Weinstein. Today, I'll discuss the top five mistakes people make when setting up their LLCs, particularly small businesses with one or just a few owners. Understanding these common pitfalls is crucial to maintaining the liability protection an LLC offers. What is an LLC? A Limited Liability Company (LLC) is a legal structure for a business. While you could also form a corporation, partnership, or sole proprietorship, an LLC is often preferred for its simplicity and benefits, such as limited liability protection. This protection shields your personal assets if the business is sued, can't pay its debts, or goes bankrupt. However, several common mistakes can jeopardize this protection. 1. Not Having a Written Operating Agreement An operating agreement outlines how the LLC will function, similar to a partnership agreement. Although not legally required in most states, having one is crucial, even for single-owner LLCs. This document h
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