Setting up an LLC for our business can help you avoid personal liability if you get sued BUT ONLY if you follow these rules. You must have a separate bank account for your LLC.  You cannot co-mingle personal money or expenses with your business revenue or business expenses. You can use your own money to start the company, but you must keep track of the money you put in. It is called your basis in the company. You must use only a credit card in the business name or your business checking account debit card. You must follow the rules in your operating agreement. Yes, you need to stipulate what assets, or each partner owns and what the starting ownership of the company is and more.

You must always write or sign business contracts in the name of the LLC. You must keep 3 to 4 months of operating expenses as cash in the business when possible. It is wise to have a liability insurance policy for the business. This way if you do get sued the policy is first in line and your business cash or assets are 2^nd in line.  When your LLC starts to net $80,000 or more you need to think about telling the IRS you wish to start acting like an S Corporation. Call James D Jones @ 410-457-7331 with your tax or business formation questions. He can give you more information and help you get started!