Do corporations really protect you?

In all states, having an LLC will protect owners from personal liability for any wrongdoing committed by co-owners or employees of an LLC during the course of business. Since forming an LLC or corporation or other limited liability entity will not protect you from all possible risks and liabilities, consider taking out business liability insurance.

Do corporations really protect you?

In all states, having an LLC will protect owners from personal liability for any wrongdoing committed by co-owners or employees of an LLC during the course of business.

Since forming an LLC or corporation or other limited liability entity will not protect you from all possible risks and liabilities, consider taking out business liability insurance.

Also, take operational steps to reduce risk, such as implementing sound business policies (including hiring and management policies) and workplace training.

Your LLC should have liability insurance that covers both the LLC and its owners. If someone sues your LLC, a judgment against it could bankrupt it or deprive it of its assets.

The LLC's primary protection relates to any liability or debt incurred by the business.


In most situations, you are safe from having your personal assets seized to pay any debts your business incurs that it cannot pay, unless you put up a personal guarantee when you took out the loan.

An LLC protects you personally from all creditors, whether they are customers, shareholders or other parties.

Liability for business activities is limited to the LLC's assets; yours are protected. 

It is a protection against things that can happen during the course of the day that involve your business.

There are a number of things you can do to protect both your personal assets and those of your LLC in the event of a lawsuit. To provide the maximum protection possible, you will need to plan an LLC asset protection strategy.

Consult with your attorney and financial expert to create strategies that protect both your LLC and your personal assets.

This ability to reduce personal liability risks and protect assets, such as the family home, car, bank accounts or other investments, is one of the main reasons to choose an LLC.

If the company is sued and found liable, your personal assets will still be protected, as long as you were not personally involved. 

Like shareholders in a corporation, all owners of an LLC are protected from personal liability for the debts and claims of the business.

As stated above, you are not protected from debt collectors if you provide the personal guarantee for a loan.

Although you need to maintain sufficient funds to pay the LLC's bills, payroll, and other obligations, extra money in the LLC's accounts can make the LLC unnecessarily vulnerable.

LLC asset protection strategies, such as keeping business and personal finances separate and maintaining adequate insurance, can help keep your personal assets safe from the company's creditors.

It is important to note that you must be able to demonstrate that your LLC is acting as a business entity in order to have the specified protection. The liability protection offered by these types of business entities helps ensure that a loss or incident that occurs in your business does not result in exposure of your personal finances and assets.

Finally, if your LLC does not comply with your state's laws regarding formalities and record keeping, then you may not have full protection.