Читать книгу Run Your Own Corporation - Garrett Sutton - Страница 9

You will be reading a great deal about the “corporate veil” and the piercing of a corporate veil in this book. Your corporate veil is the shield that protects your personal assets from creditor attacks. The strength of your corporate veil is determined by how well you follow the laws, regulations and requirements of your corporation. Piercing the corporate veil sounds painful, and it is! When the corporate veil is pierced, the entity’s veil of limited liability is lifted and your personal assets are exposed to a creditor’s claims.

So you want to focus on the separation between your entity and the owners of that entity, which we shall discuss throughout the book.

Know that one of the reasons to incorporate is to create that veil, so that you are not liable for the actions of the business – the debts, the mistakes and the liabilities of the corporation. The moment your corporate veil is breached, you are personally at risk.

Of course, the reason that anyone would attempt to pierce a corporate veil is because the corporation itself does not have enough assets to satisfy the claim. The creditor sees that the shareholders do have money, and seeks to get beyond the corporation to reach the individual’s personal assets. A recent study found that piercing the veil was successful 48% of the time. That is a huge success rate, and it points out that far too few entrepreneurs and investors are taking the necessary steps to protect themselves.

The advice in this book is designed so that you may set up your business (or hold your real estate or other assets) in its own entity, separate from you and avoid a piercing of the veil. Understand that we are dealing with a veil. Not a wall, not a mirror, not a net. It’s a veil – a sheer division where you can see the effect of what is happening, but you can’t actually touch it, and it can’t touch you. Unless it is pierced. Your corporation as a distinct entity is responsible for corporate duties and liabilities, and is entitled to credit and profit. If you set it up correctly, it will be a separate, compartmentalized entity, with limits and boundaries, all of which will benefit you. If not, all you have is a legal fiction. And obviously a fiction isn’t going to help you in a courtroom reality.