Single Member LLC questions

[CSC]

Hello, I own a single member LLC which is also a home based business and have a few questions. My accountant is good but not good at explaining in detail some items. My questions are as follows


First here is what I do do...I enter everything into Quickbooks and it is all reconciled. I was even audited by the IRS 2 years ago and passed. My business credit card pays for everything my business buys it also pays for my home utilities since I am a home based business and I believe my account writes off a portion of the whole electric bill, water bill etc...

I also use a 12x12 space for my office and use my garage for product storage and write those sections of my house off. now my questions are below because I am a consrevative person who does not want to get into trouble with the law or sued as I want to protect my assest for my wife and little girls.


1. She told me to have protection under the LLC I have to act like a corporation which includes meeting minutes. I researched it and found I have to hold a meeting with myself going over items. So I doing meeting minuted every January going over the previous year and goals for the upcoming year. Is doing meeting minutes once a year in January enough or do I have to do it more often?

2. Are there any other thing like meeting minutes I have to do to act like a corporation? Basically what ALL do I have to do to be protected? (please explain in simple terms if possible if you can haha)

Thanks for answering :)

[vangogh]

I'm pretty sure you want to keep business and personal separate. In other words you shouldn't be using your business credit card to pay for home utilities even though a portion of your home is used for business. I think the rules might also be dependent on what state you live in.

Here's an article (http://smallbiztrends.com/2011/06/corporation-llc-in-compliance.html) I found that lists a few things you should do to maintain your standing as an LLC

Hope that helps.

[CSC]

Thanks for the reply that helped 2 questions.

1. I am not an scorp I am just a single LLC. Do I have to do meeting minutes?

2. This paragraph from that article is below:
Make sure you’re legal when conducting business out of state: If you’ll be conducting business in a state other than the state where you formed your corporation or LLC, you will need to obtain authority or permission to do so. In most cases, this entails qualifying as a Foreign Corporation or LLC within the state that you will be doing business within. The actual name of the form varies (for example, it’s called a “Statement and Designation by Foreign Corporation” in California) and it’s typically filed with the state’s Secretary of State’s Office. Specific licenses and permits may also be required for certain types of businesses as well.

i have an online business does this mean I have to file this form in every other state than mine?

[BizAdvisor]

For starters, I'm not a huge fan of the "act like a corporation" statement. Primarily because the appeal of an LLC, for many business owners, is actually NOT having to operate your business as a corporation.

Unlike a corporation, an LLC is not obligated to hold meetings or record minutes... Nor do LLCs generally lose their liability protections for not doing so. Especially single-member LLCs; whereas a single person meeting is, in all honesty, damn near irrelevant and void of any parliamentary procedure. When you, as a single-member LLC, record minutes, you are basically, in simplest explanation, creating documentation to validate your attempt to operate your business "legitimately" by doing business-like things. However, there are other ways this can be done. For example: Amending your Articles of Incorporation, which can be done at any time and as many times as you want.

As for your last question... No.

[CSC]

One mroe question I will keep not pay for my home utilities anymore with my business card but I can still pay my healthcare with my business correct?

[BizAdvisor]

One mroe question I will keep not pay for my home utilities anymore with my business card but I can still pay my healthcare with my business correct?

That is actually a pretty good question, in which I am not too sure about. My first thought would be NO, since your business credit card is there for business purposes, yet your healthcare is under a personal plan and not necessarily any small business plan. So, it appears there is definitely a separation there, or a veil. So, if you were to pay your personal healthcare at your business' expense, you may very well, unknowingly, be piercing the veil... Which is a pretty big no no.

But, like I said, I am not too sure about it. I'd like to see what others have to say. Perhaps we can both learn something new.