Corporate formalities

In order to maintain personal
limited liability, it is essential these described actions be avoided. Courts in recent years have found ever expanding reasons to hold directors, officials and shareholders personally liable for corporate responsibilities. Among other activities courts have found that may impose personal liability are improper corporate guarantees of loans or contracts benefiting an officer, timing of the sale of a controlling interest in the company for self-benefit, profiting from inside information, transactions with other businesses which may constitute conflicts of interest, unreasonable loans to company officials, and extension of unwarranted credit.

To fully retain the benefits of incorporating, you must observe corporate formalities, even where the corporation is operated by a single shareholder, director, officer.