The limited liability company has become a monstrously popular business entity for small businesses. As with most of its ilk, the entity has positives and negatives. This is particularly true when it comes to the issue of piercing the veil of single member LLCs.
States each have their own laws governing if and how LLCs can be formed in their state. Many allow for a form of the entity where there can be one owner. Most people now realize this can cause a problem with taxes because the IRS does not recognize these entities when they choose to be taxed as a partnership. While the disregarded entity ruling by the IRS is problematic, there is a second problem with single member LLCs that are even more lethal.
Why do you form an LLC or corp? To gain protection from the debts and liabilities of the business. This protection is created by the corporate shield. Suing parties, known as “Plaintiffs”, will often try to get around this shield. This is known as piercing the veil and it can be a real problem with single member LLCs.
So, what is the problem? Well, most single member LLCs are formed through cheap online services. The member receives the LLC and then assumes the business is ready to go. It is not. The entity is valid for legal purposes when initial documentation like operating agreements, issuance of interest, security filings [when necessary] and capitalization occur. The vast majority of these new LLCs never have any or all of this done. This opens them up to claims of piercing the corporate veil, a claim that is successful over 40 percent of the time in California, for instance.
There is nothing inherently wrong with single member LLCs so long as they are set up and maintained correctly. Unfortunately, most are not. This creates a false sense of security for their owners, one that is a time bomb just waiting to explode. To avoid such problem, you should get an attorney to look into and fix the errors.
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What are the possibilities of Arizona immigration law is being canceled out by the Supreme Court?
Curious. Wow these responses are freakn terrible.
If the district court has the case, I suspect that respect the law, but to issue a stay while it is being appealed. 75% I doubt very seriously if the court district, even up, but send it directly to the court of appeals. As the Ninth Circuit in San Francisco is known for its liberal interpretation of life "" constitution, I trust that invalidate the law. 75% Most of the comments I read on the web that are against the law have said it is a violation both the fourth and fourteenth amendments to the Constitution. Unless you have read the law, I do not see how they can make those comments. What is critical to the constitutionality (Or not) is the exact text of the law and its implementation. As to the fourth amendment, I guess the posters referred to the "right of people to be secure in their persons … against unreasonable searches and seizures "section. And as for the 14th Amendment, it is most likely referring to the" equal protection of the l aws "clause Section 1. From everything I've read and heard in interviews with the legislatures of Arizona and Governor Jan Brewer, who were very careful about how to analyze language in the law in order not to violate these sections in particular. Again, depends on the exact language and the application. Personally I applaud Arizona for having the audacity to take action when the federal government has failed for decades to correct an obvious problem for which it is responsible under the Constitution.
