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How Can Business Owners Be Exposed To Personal Liability?



Once you have organized your business, you are still not entirely immune from personal liability. When courts impose liability on individuals for the actions of the corporation, this is referred to in legal parlance as “piercing the corporate veil.” In order to avoid personal liability for debts and other acts of the corporation (or LLC) you must run your business entity as a truly distinct and separate entity from the personal affairs of each owner.

The corporate shield cannot merely be a façade with no real business purpose and the business should display characteristics resembling an actual, ongoing business. In closely-held corporations (very few shareholders), the same individuals tend to act in several different capacities, and this requires an effort to maintain those distinctions. Not to mention, owners of small businesses tend to naturally treat all income as personal income and use business assets for personal use.

The courts typically look at whether there is “a unity of interest and ownership such that the separate personalities of the entity and the owner no longer exist and upholding the distinction between the owner and the entity would be an injustice.” In other words, if the corporation or LLC is the alter ego of the individual and recognizing the distinction would be unjust or fraudulent, the veil will be pierced. It is impossible to describe everything you must do to avoid having the corporation or LLC seen as a mere extension of the owner. However, it is important enough that you must have a basic understanding of what you should and should not do to help insulate yourself from personal liability.

A member of an LLC or shareholder of a corporation can be held personally liable for many different types of claims, but they typically arise under these different scenarios:

1. Claims arising out of an act or omission by the owner directly, such as the owner’s own negligence, fraud, illegal act or violation of a fiduciary duty;

2. Claims arising out of a contract, particularly one that was personally guaranteed by the member;

3. Liability for unpaid employment taxes, wages, worker’s compensation insurance and unemployment contributions;

4. Claims based on the concept of “piercing the veil” of the LLC;

5. Liability for consenting to or receiving a distribution in violation of the LLC’s operating agreement or the applicable LLC statute.

These claims are not a result of choosing an LLC over a corporation, or vice versa. All of these exceptions apply equally to shareholders in corporations and members of LLC’s. But, there are many exceptions to the rule of limited liability. Many LLC members or shareholders will find that, due to the way the business was operated, the promised protection from the liabilities and claims of the business is not meaningful.

Important Factors Used to Pierce the Veil

The courts will generally determine whether or not you, or the other owners, have conducted the business as a separate and distinct entity, and not as the ‘alter ego’ of the owner(s), as stated. But what actions or non-actions by the owners demonstrate this in the eyes of the courts? State courts will look at all of the separate facts and the circumstances of each case to determine whether or not to pierce the corporate veil. There are some common factors that show a court your business was set up as a sham or was an extension of yourself. Under capitalization, where it is clearly shown, is an important factor. But, it is not an absolute ground for piercing the corporate veil by itself without other factors existing.

Here are the most common and key factors considered by the courts in determining whether to pierce the corporate veil:

1. Whether the corporation follows corporate formalities (I.e., creating and following the requirements and procedures set forth in the bylaws, keeping minutes of shareholder and board of directors meetings and creating resolutions for important company actions);

2. Absence of corporate records;

3. Inadequate capitalization. The corporation is under-capitalized at the time transactions with creditors or others wishing the corporate veil to be pierced were entered, or simply not enough capitalization to get the particular corporation running). State laws govern the formation of a corporation. Inevitably, these laws set forth amounts or formulas for determining the minimum capitalization amount required for a corporation. You must review the laws in your state to determine the amount and make sure you meet the contribution minimums. Simply put, the lack of capitalization means the corporation was never a viable entity because it had insufficient funds to back debt obligations;

4. Whether the major shareholders are using money from the corporation for their personal use (I.e. when the shareholder(s) takes money from the corporation to pay their personal bills or buy gifts for themselves, etc.) or where they use other assets for personal use or gain;

5. Non-functioning of other officers or directors (having officers and directors who do nothing and were put in place by a majority shareholder, but are not actively involved in the directing the business and affairs of the corporation);

6. Commingling of funds and other assets between major shareholders and the corporation (or LLC);

7. No corporate assets whatsoever;

8. Use of corporation to transfer liability of another (usually a shareholder);

9. Failure to issue stock and non-payment of dividends;

10. Failure to keep records of expenses and gross receipts;

11. Contracting with another without the intent to ever perform on the obligations;

12. Failure to maintain arms-length transactions with third parties.

These are not the only factors the courts have considered, only some of the most common and ones you should absolutely follow at all times.

Piercing the Corporate Veil of LLC’s

Generally, a member or manager is not personally liable for a debts, obligations, or liability of the LLC solely by reason of being or acting as a member or manager. However the concept of piercing the corporate veil does apply to LLC’s and the courts can and have permitted members of LLC’s to be personally liable in some instances. Some states including Minnesota and Colorado have adopted statutes that specifically apply the concept of piercing the corporate veil to LLC’s. In other jurisdictions, such as Connecticut, Louisiana, Georgia, California, etc., it is the courts that have generally applied the concept of piercing the corporate veil to LLC’s through case decisions.

Despite what you hear about LLC’s, the Members will be personally liable if the corporate veil of the LLC is pierced by a court similar to shareholders. The courts will apply the same general alter ego analysis used for piercing corporations, but sometimes without regard to a lack of corporate formalities. While some corporate formalities do not have to be followed under the LLC organizational statutes, this does not give the members of an LLC carte blanche to operate as they please and avoid personal liability. For instance, annual meetings are not required under most state LLC statutes nor is there any detailed notice requirements for meetings and elections. But, certain corporate formalities common to both entities should be followed the same basic recommendations that corporations must follow should be followed by owners of an LLC operating an Internet business.

Actions of an Owner as a Director, Officer or Manager

Shareholders, officers, directors and members of an LLC are always personally liable for their individual criminal acts. They are also always personally liable for their own direct acts or omissions that result in harm to persons or property (I.e. torts), even when those acts were done during the course of company business. For instance, if you are an electrician and you leave a faulty wire exposed, the fact you have formed an LLC will not shield you from this negligence.

Similarly, if you drive the company vehicle and injure someone on your way to a business meeting, you are still always personally liable for your own personal actions. To the extent you direct or authorize in your capacity as director, officer or manager an action that is or results in a criminal act or causes damage to persons or property, you can be held personally liable. Every member who actively participates in the business of the LLC or corporation runs the risk that his action or inaction will result in personal liability. This is particularly a risk of a service business in which the members provide the key service. In the example I used above, if you are an electrician and you leave an exposed wire that electrocutes someone, your LLC is not going to protect you. The same thing holds true if you are a shareholder.

If you make promises about your product or service that are not true, there may be a claim against the entity for breach of contract. However, if the LLC cannot perform or pay damages, the injured party may come after you for fraud or a similar claim based upon your own action. Even if you have an employee who committed the action, you may not be out of the woods. If you personally hired the employee, the injured party may have a claim against you for negligent hiring if a reasonable person would not have hired that employee.

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Home Improvement

Why Professional Packers and Movers is Important for a Perfect Move



Professional packers movers to shape your move
Professional packers movers to shape your move

Shifting means lots of works. You are excited for sure to move to a new home. But along with the same, you need to pack the things safely. The new city, new home and more give you an emotional ride. So, to make it easier, you may think to hire the packers and movers. They will handle all your shifting needs for sure. Is it not a major reason to hire the packers and movers? Surely, it is. There are many such reasons why you need professional packers and movers for a perfect move. Want to know about it, then here the article is just for you. Read this and know the reasons.

Reasons to hire professional packers and movers to shape your move

When you have the assistance of the best packers and movers, there are many things that become easier. You don’t need to think about anything. The move gets the shape of your desire. Want to know how it helps you, then read this write-up.

1. Safe packing and moving

When packers and movers Bangalore will work for you, it comes to you with safety. The experts know each technique to pack and move. If you have decor items with you, then also, you don’t need to worry. This is for sure that each one gets the right attention. You find that the expert moves those safely to your new place. Arranging such packing materials and moving those will never be possible without experts. So for taking care of these, you need the expert. Without them, the shifting can’t be in shape.

Their loading and unloading techniques will also make the move safer. So, don’t waste your time thinking much. Trust the expert and make the move perfect through the help of professionals.

2. No stress for you

When you hire the expert, you may think about the packers and movers charges Bangalore. It is for sure that you need to pay their remuneration. But in return for that, you get peace. There is nothing that you need to think about. You find that everything is perfect and that to be as per your preferred schedule and more. You can move without disturbing your daily routine. Is it not something that you love to experience? Surely, your answer will be a big yes. So, to experience the best transit, you need to hire the perfect expert and make the entire move perfect for you. This also helps you to return to your regular transit.

3. Warehousing

It can be possible that you have to put your things in storage for a time. When professional packers and movers in Bangalore will be with you, then you find the warehousing services in Bangalore and more easily. So, don’t waste your time thinking much. You just choose the best expert for the work. You find that the move gets the shape that you are opting for. So, for this reason, trusting professionals and going with them will be the right call.

4. A perfect budget

You are thinking about the charges of packers and movers in Bangalore. And this gives the reasons to do it on your own, then you are wrong. Yes, it is. Actually, if you count all the efforts, time, and more, you find moving with professionals is less costly than moving on your own. So, trust the expert. It will be much easier and within your budget. Obviously, this is another reason why hiring an expert will be the best to make your move perfect.

5. Insurance

The professional packers and movers provide transit insurance to the goods while house shifting in Bangalore. So, when you hire them, there will be no worries about the damages and more. You find each thing is protected and in case of a single scratch, you find that fixed in its original shape. Yes, you read this right. The claim is settled quickly as well. Is it not something you love to go with? Surely, it is a big yes. So, choose the best movers and packers and make your transit awesome. Managing all on your own will never be a good call. Trust the expert and experience the move of your desire.


Now, you must have the idea of why you should prefer to move by packers and movers. So, don’t waste your time thinking much. Trusting the expert will make the entire move easier for you. There will be no stress for anything. At the same time, you can use your time as per your regular schedule. You can enjoy the transit as well to make new plans for exploring the place.

Don’t forget to share your experience here. It helps many people to make their minds and experience the hassle-free move.

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What Do Betta Fry Eat?




Betta fry are difficult to raise. One of the toughest things is, well what do they eat. Do not try using powders or flakes, it will just totally foul up the tank. The best thing I have used is microworms. These are tiny little wiggly worms that you can grow yourself and never run out of them. I purchased my first microworm culture from a site called aquabid. Make sure you get this culture before your betta fry are born. Like probably a week before. When the fry are swimming freely, and ready to eat then its time to feed them these microworms.

What I use is a mashed potato mixture to a consistency of like peanut butter. I just used potato flakes and water and put them in a small clear bowl with a lid with small wholes in the top. Place a tablespoon of the culture you got from aquabid in the center of the bowl on top of the mashed potatoes. After about a week, you will see them crawling up the sides of the bowl. Sounds kinda icky, but its not too bad. Then you can take a Q tip and run around the sides of the bowl pulling off the microworms. Then just empty them in the tank off of the Q tip. You will be able to see them wiggle and see the baby betta frys eat them. Do this twice a day.

Its good to have 2 to 3 cultures of microworms growing at all times. All you have to do now is repeat the instructions above and you will never run out of food for your betta fry. The culture usually last about a month or so, so always make new mashed potatoes and take a table spoon from the one you grew and start another one.

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What Does It Mean When He Says You Are Special? Here Is How to Easily Decode Your Man’s Language




Normally men are lateral thinkers. They say what they mean. But when it comes to relationships they get all jumbled up. If your man says that you are special to him then here are some of the possible things that he could be meaning.

He is interested in you seriously

When a man tells you that you are special to him then he is trying to tell you that he is getting serious about you. Since he doesn’t want to come on too strongly he chooses his words carefully so that you both can ease into your relationship.

He wants to take things to the next level

If you have been dating for a while and your man says that he finds you special then he is implying that he wants to take things to the next level with you. He wants to approach the relationship with caution and hence is taking baby steps to let you know how he really feels.

He is letting you know that he cares deeply for you

By telling you that you are special to him your man is letting you know that he cares deeply for you. He says this to make it clear to you that you are not ‘just a friend’ to him but a whole lot more.

He could be trying to create a diversion

Sometimes a man can say that you are special to him just to create a diversion. If he is not sure of how he feels about you and yet feels the need to validate his feelings for you, then he says that you are special to him. It is his way to make you stick around till he is able to figure out what he really feels for you.

He could be shy to tell you that he is falling for you

Some men are shy and cannot find ways of telling their girl how they truly feel about them. Your man too could be falling deeply in love with you but for the lack of courage would settle for saying that you are special to him.

He has finally understood his feelings for you

Sometimes a man takes time to identify his real and true feelings for you. If your man has finally come around to understanding his real feelings for you then he will tell you that you are special to him.

He calls you special to retain his macho image

There are some men who feel that admitting how they really feel makes them less macho. Your man might tell you that you are special to him to let you know of your special place in his life and yet maintain his macho exterior.

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