LLC Compliance: What You Don’t Know Will Hurt You
One of the advantages of forming an LLCs is to create a separation from the owner’s assets and the liabilities of the company. But many times, an LLC is formed with little understanding of the legal requirements in order to maintain the protections that an LLC affords its owner or owners. At Horizon Attorneys and Counselors at Law PLC, we regularly sees instances of non-compliance with LLC governance, including:
- Inactive Status – failure to file annual reports
- OTC Suspensions – failure to file annual franchise taxes
- Outdated Registered Agent, location addresses or contact emails
- No annual minutes or special minutes that document important LLC activity
- No Operating Agreement or one that is outdated or deficient as to tax status, ownership, buy-sell provisions and creditor protection.
- Series LLCs without the proper Secretary of State designation.
- LLC assets are not properly aligned with the LLC, such as real property.
- LLC ownership that is not properly aligned with the member(s) estate plan.
- LLCs that are operating in states where they have not registered to do business.
- Instances where tax elections can generate significant tax savings.
Failure to keep your LLC in compliance weakens and in some cases may eliminate protections and could enable a creditor or claimant to “pierce the corporate veil” and obtain a judgment against your personal assets to satisfy a claim. The State of Oklahoma has started to focus on single member LLCs, primarily disregarded entities, for sales tax purposes, to see if they are “sham LLCs” – those that are lacking in sufficient substance.
You don’t have time to worry about corporate governance requirements when you are trying to grow and maintain your business. Horizon’s Business Protection Program was established to assist business owners with their compliance requirements. We assist LLCs, non-profit and for-profit corporations, and foundations with their annual requirements as well as provide legal support for a low annual fee. Contact us today and let us tell you how we can help!