May 232012
 
Lack Of Insurance May Be Justification For Piercing The Corporate Veil

Last week we discussed the legal phenomenon known as “piercing the corporate veil”.  If judgment creditor succeeds in a piercing action, courts can ignore the corporate liability shield and hold the individual owners of the company personally responsible if there is not enough assets in the company to satisfy their judgment.  This often happens when the evidence shows that the business did not follow proper corporate formalities, when owners commingle business funds with personal funds, or where the owners failed to adequately capitalize the business. When the company does not have insurance, or has not purchased enough insurance to keep More…

May 162012
 
Forming A Company May Not Be Enough To Protect An Owner’s Assets

Many people are familiar with the basic liability protections afforded to the owners of a business entity such as a Florida LLC, corporation, or limited partnership.  These legal structures allow for the protection of their owners from personal liability in the event of a successful lawsuit against the company.  However, what may not be as well-understood is the fact that this protection is not absolute.  Courts can and will ignore the corporate liability shield if the circumstances call for such treatment.  This legal doctrine is known as “piercing the corporate veil.” If challenged in a lawsuit, IRS audit or other More…

Nov 102011
 
The Benefit Of Converting A Florida Corporation Into An LLC

Previously, we published a blog detailing the 2011 Florida legislation which established that a charging order is the sole remedy available to a creditor who holds a judgment against a member of a multiple member LLC.  Following this development, the use of a Florida multiple member LLC to obtain asset protection now appears to be a well-established facet of Florida law.  Conversely, stock ownership in a Florida corporation is freely attachable by an individual’s creditors.  These asset protection benefits, along with the flexibility of the Florida LLC statutes and the lower general cost to operate a Florida LLC when compared with More…

Sep 202011
 
Understanding “Inside” And “Outside” Asset Protection

Oftentimes, when proposing an asset protection strategy to a potential client, the concept of “inside” and “outside” liability protection comes up.  The purpose of this blog is to explain the difference between the two and why both are important to any good asset protection plan.  In Florida, one of the most common ways to obtain both inside and outside liability protection is through the formation or a multiple member LLC.  Thus, we will use the LLC as our example in this case. In regards to “inside” protection, a Florida multiple member LLC protects the assets of the LLC owners (commonly More…

Jun 012011
 
Florida Law Update: Governor Scott Approves Olmstead Legislation

On May 31, 2011 Governor Rick Scott approved House Bill 253. House Bill 253 is legislation drafted in response to the 2010 Florida Supreme Court decision of Olmstead v. FTC, in which the Court held that, with respect to single member LLCs in Florida, the charging order was not the exclusive remedy available to a creditor holding a judgment against the single member. In the Olmstead case, the Court ordered the debtor to surrender all right, title and interest in his LLC to satisfy an outstanding judgment. This case left the asset protection status of the Florida LLC, both single More…