Maintaining Your Company Record Book
There are many large and small businesses in the greater Charleston, S.C. area operating behind the shield of limited liability protection afforded by a corporation or limited liability company. This means that in many circumstances the owners of the company will not be subjected to personal liability if the company is sued for damages in cases such as breach of contract or personal injury. However, to benefit from the limited liability protection afforded by a corporation or a limited liability company, South Carolina law requires that the company comply with certain legal formalities or risk losing that protection. The loss of the limited liability protection is commonly referred to as "piercing the corporate veil." Whether a plaintiff is allowed to look behind the company and sue the individual owners for personal liability depends on a number of factors. One important factor is keeping the company record book up to date. At a minimum, annual meetings should be held and documented. In lieu of an actual meeting, the law allows a written consent to be used so long as all of the company's owners sign the consent. Also, meetings or consents should be used when approving any major action by the company. Please call us with any questions.
- 5 months ago
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