What’s the point of setting up an LLC to protect your personal assets if you aren’t going to follow the rules and “pierce the corporate veil”? Based on a conversation earlier this week, today we cover the importance of separating your business and personal finances to protect you down the road. Give a listen to find out more. Check out the website for more content www.bcbousa.com
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It is Dan’s favorite day of the work week – Thursday! Today is the day he spends time going over the company financials, schedule, in progress reports, etc. A friendly reminder that all business owners should be setting time aside each week to do these things. It makes a big difference in the success of your company.
Earlier this week Dan had a monthly meeting with a client to go over their business. How are they doing on their jobs? How is their cash flow? Any red flags that need to be addressed? Things of that nature. During the conversation an important question that comes up often was asked about using the company credit card to make personal purchases. The transactions are being posted properly as an owner’s draw, etc. so is it really that big of a deal?
The short answer is that yes, it can be a big deal. If you have established an LLC one of the main reasons you did that was to protect your personal assets in the case of being sued or filing for bankruptcy, etc. If you use your business cards or commingle your business and personal expenses in any way you could be in position to lose that protection down the road – it is called “Piercing the Corporate Veil”. It is very important that you operate your business as the business and operate your personal life as your personal life. Taking money out of the business as an owner’s draw is fine, using the company credit card to go shopping on Amazon for personal items could have consequences down the road.