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Smart Way #1: Make sure you set up your business entity properly.
This means that you must make sure that the entity's structure is well documented -- and correctly documented -- to demonstrate that it is an individual entity. Your documentation should include articles of incorporation or articles of organization, the bylaws or operating agreement, minutes and resolutions of all shareholder and directors meetings, including organizational meetings, appropriate state and federal tax identification numbers, state and local business licenses, financial institution authorizations, a list of corporate assets and liabilities, a corporate stock ledger, a buy/sell or stock redemption agreement, assignments of corporate interests, corporate annual reports, bank account records, corporate financial books, and more. Failing to maintain these records undermines the validity of your separate business entity and will lead a court to pierce the veil and find the owners personally liable.
