What Does It Mean To Pierce The Corporate Veil?
When you create a business structure, that business structure is separate and distinct from the individual owners or shareholders, managers, and officers. They are immune from being sued by outside individuals from the debts of the corporation or LLC. A plaintiff can pierce the corporate veil if the defendant in this case, which might be one of the managers or the owners, exercise a type of control over the company in such a manner that they are committing a fraud or some sort of unlawful or illegal act. By piercing the corporate veil, they are using the corporate structure to commit that illegal act.
What Is An LLC or Limited Liability Company?
A Limited Liability company in Ohio is a business entity structure. Limited liability companies are companies that provide legal protection to the owners of the business. They provide protection to the individuals that own the business so that outsiders cannot come after their personal assets to recover for the debts of the actual LLC.
How Is An LLC Formed?
In Ohio, an LLC is formed by filing paperwork with the secretary of state. LLC formation in Ohio is quite streamlined. Most of it can be done online through an online portal on the secretary of state’s website. It is a short form that asks specific questions about the name of your business, the people who are forming the business, what the nature of your business is, and how long you want this LLC to be established. Once you fill out that paperwork and you file it electronically with the state of Ohio, if it is a valid filing, they will accept it after you pay a fee of $99.
What Is A Corporation?
A corporation is much more of a formal structure of a business. An LLC is a simplified and relatively un-complex business entity. A corporation tends to be more complex. They have many more internal regulations and documents. You are required to have, for example, a president, a secretary and a treasurer. In Ohio, you are obligated to provide the state with certain yearly disclosures and reports. The tax structure of a corporation is significantly more complex.
Are There Different Types Of Corporations?
In Ohio, there are several types of corporations. There are professional corporations, which might be a group of attorneys or accountants. There are what are called S corporations, which are small corporations. There are certain restrictions on what type of businesses can operate as S corporations. They can only have a certain number of owners and there are certain reporting requirements and very particular tax reporting requirements. There is also the most common type of corporation, which is a C corporation. C corporations are usually publicly held corporations that have outside shareholders and their ownership is easily transferrable amongst the parties, amongst the shareholders, and those who share certificates of that company’s stock.
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