Liability and Asset Protection

In today’s ‘lawsuit-happy’ environment, it’s more important than ever to put a legal shield between you and your creditors. As a completely separate entity, Limited Liability Company's separate the owners from the business itself. There is no personal liability for any Limited Liability Company debts even if they relate to a contract or tort. The operating agreement can, for the most part, contain any procedures and rules that the parties desire and once put in place can just sit there maintenance-free. The initial drafting of the operating agreement is very important because it must comply with state and IRS regulations so that the Limited Liability Company will be taxed as a partnership and not as a corporation.