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Nov. '19LLC Talk: Single-Member LLCs - Asset Protection
Nov. 8th, 2019 • by Jeffrey Pote
A limited liability company (LLC) is supposed to protect your personal assets from the liabilities of your business. That’s why it’s called a limited liability company. But, for various reasons, some have thought that a single-member LLC (SMLLC) does not actually provide asset protection for its owner (member).This article discusses the issue of whether a SMLLC protects the personal assets of its member. The short answer is that Colorado courts understand that a primary reason for creating a separate business entity is to obtain liability protection and, accordingly, a SMLLC can protect personal assets from liability. But the longer answer is a bit more complex than that. The first thing to understand is simply forming a separate limited liability entity – of any kind and with any number of owners or managers – is not by itself enough to guarantee the protection of the personal assets of its owners. A court may lawfully "pierce the veil" of any entity; that is, any entity may be legally ignored or disreguarded in…
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