Operating your business as a limited liability entity generally protects your personal assets from claims of business creditors, but the informal operation of small to mid-sized and family-owned businesses can sometimes weaken that protection when things go bad, allowing a business creditor to reach the owners’ personal assets. Some of the areas where the risk is highest include:
- Signing Documents/Guaranties. Avoid personal guaranties, recourse loans and providing your personal information for business credit, and always sign as a representative.
- Breach of Fiduciary Duties. Officers, directors, employees and sometimes shareholders owe fiduciary duties to the entity and their improper conduct gives