LLC Limited Liability Requires Proper Use

I am often speaking to new clients about setting up a web site and suggest they create an LLC. They then tell me that they have an LLC and I ask if they use it properly. Often the reply is, “I just have one.”

To limit your liability with an LLC, you need to inform the people you are working with that they are dealing with an LLC. To do this, you need to sign every email, document or other correspondence as follows:

Your Name, Managing Member
Name of LLC

John Doe, President

If you are signing a contract, but the word “By” in front of your name:

By John Doe, President

In my examples above, I used the title President instead of Managing Member. When you have the Organization Meeting of your LLC, you can assign a corporate title to the Managing Member. I always suggest to my clients they do that as people understand the title President and don’t often understand what a Managing Member is.

I mentioned an Organizational Meeting above. You need to have this meeting, even if you are a 100% owner of the LLC, (when you just meet with yourself.) You need to create minutes of this meeting, appointing the Managing Member, giving them a title, choosing an accountant, a bank and a lawyer.

Please feel free to contact me with any questions you may have concerning this blog post.