How Can You Increase the Protection of Your LLC?

The limited liability company "LLC" is one of the most well-known business entities and usually works well for most businesses. The LLC is a flexible formation that blends elements of the partnership with the corporation. The LLC is a somewhat newer entity, and each state has different statutes and case law that factor into its overall level of protection.

The following are ways to increase the protection of your LLC structure:

One of the first things we look at is both the operations and operating agreement of your LLC. This is where the real protection comes from. We want to ensure that you have an operating agreement that defines the company’s protection. Failure to draft an air-tight operating agreement may lead your LLC into legal trouble. Furthermore, when operating your LLC, it is critical to remember not to co-mingle your business and personal finances. If you frequently pay personal expenses from the LLC or pay LLC expenses from your personal finances, your claim for protection by the LLC will be more difficult to uphold.

Titling your LLC to a Limited Partnership is another way to add a layer of protection to your LLC. If you do not own the LLC in your personal name directly, personal creditor attacks are additionally insulated. Having a limited partnership can be even more beneficial when multiple LLCs are involved.
An even stronger way to protect your LLC, is to have it be fully-owned by an international Asset Protection entity. This will further protect your LLC and can be extremely beneficial if there are significant assets at stake.

Another technique to deter potential litigation is to equity strip any assets you have in the LLC. If there is no visible wealth or value to be won from a potential lawsuit, litigation is much less likely to occur.

If you have any specific questions about the protection of your LLC or need assistance with ensuring your operating agreements are drafted properly to protect you and your assets, we serve clients Boca Raton. Please reach out to us for a complimentary preliminary consultation.

The Presser Law Firm P.A.
6199 N. Federal Highway, Boca Raton FL 33487
(800) 999-9992 or e-mail