Video instructions and help with filling out and completing Will Form 1065 Schedule M 3 Taxpayer

Instructions and Help about Will Form 1065 Schedule M 3 Taxpayer

Hello everybody I'm attorney Aiden Kramer with the law office of Aiden Kramer in Colorado and this is all up in your business now you may be thinking to yourself avoiding the risks of the single-member LLC I think I've already seen this video well that's right one of not one of my most popular video is called avoiding the risks of the single-member LLC it's substantially more popular than any of my other videos and has a lot more views than any of the other ones which is fantastic except for the fact that I hate that video I filmed it a really long time ago it was actually one of the first videos that I ever did and it was way back when before I had any good equipment before I learned how to edit videos and before I learned how to angle cameras so I didn't have 15 Chin's I hate that Dern video and I wish it would go away so the purpose of this video is 100% for my own vanity I'm going to redo it and hopefully eventually phase out that old video and delete it and then we can all forget that it ever happened so if you've already watched that old video I encourage you to still watch this one because I'm going to be talking about the same things but in a little different style and I want you to watch this one and forget about that old one okay all right let's talk about avoiding the risks of the single-member LLC so in an LLC the owners of the LLC are called members so a single-member LLC is an LLC that only has one member the primary purpose of forming an LLC for your business is that an LLC provides limited liability protection so with an LLC the idea is that all of the assets of the business owner of the member would be protected from any of the liabilities of the business so the businesses sued or the business has debts the owner's personal assets are protected and shouldn't be liable for any of those liabilities that's the way that it's supposed to work but there are instances they're a court or a judge would decide to pierce the corporate veil and still make the owner personally liable for the business's liabilities and debts that is called piercing the corporate veil and it essentially means that this veil of liability protection gets Pierce and the person the owner is now personally responsible for business debts and there is a higher risk of piercing the corporate veil with a single-member LLC because there's just less separation between the member the business owner and the LLC and a single-member LLC then there typically is in a multi-member LLC that you don't have those checks and balances that come along with working with other owners and you might feel like you have more freedom to do whatever you want because you're the only owner and you're not really accountable to anybody else most courts are more hesitant to pierce the corporate veil in a multi-member LLC because they don't want to readily make all of the members personally liable for something that may be only one of the members was responsible for in the business so that's why it's a little easier sometimes for courts to pierce the corporate veil in a single-member LLC but luckily for all of us single member LLC's there are things you can do to limit that risk and hopefully keep up the liability protection of your LLC the first thing you can do is to make sure you follow legal formalities pretend you're in a multi-member LLC and do all the things that an multi-member LLC would do that includes having an operating agreement for your LLC if you had business partners you guys would have a partnership agreement in an LLC that's called an operating agreement so just because you're by yourself doesn't mean you get out of having to have an operating agreement for your LLC other formalities such as organizational documents and organizational resolution those are important as well making sure you keep adequate records of transactions and things that your business does having those records helps to uphold the liability protection in a single-member LLC another important corporate formality that you would do in a multi-member LLC is to hold meetings and have meeting minutes that document what you talked about during that meeting decisions that were made actions that you decided to take all of those things would normally be held in a multi-member LLC so you need to still do them in a single-member LLC even though you're the only owner it might seem weird to have a meeting with yourself but that's exactly what you need to do have a meeting with yourself document decisions that you've made by yourself stay tuned for after this video I recently had a member meeting with myself and I recorded it and I'm going to put it at the end of this video so you guys can see what that meeting looks like in a single-member LLC another important thing to do to avoid piercing the corporate veil and avoid those risks in a single-member LLC is to keep your LLC adequately capitalized you can't under fund your LLC in an effort to avoid liability if you take all of the money out of the LLC and figure if somebody Sue's me there's nothing in the business for them to get anyway you can't do that you have to have adequate capitalization enough money in the business to keep the business running to pay overhead and all of those things I've made another video in the past of talking more about adequate capitalization so you can check back to that if you have more questions about that the next thing that's important to do and really really important to do in