{"id":1056,"date":"2017-12-30T21:12:34","date_gmt":"2017-12-31T02:12:34","guid":{"rendered":"https:\/\/businesslaw.smithrayl.com\/blog\/?p=1056"},"modified":"2023-11-28T13:36:49","modified_gmt":"2023-11-28T18:36:49","slug":"maintaining-indiana-llcs-part-ii-best-governance-practices","status":"publish","type":"post","link":"https:\/\/www.hpindiana.law\/business-blog\/maintaining-indiana-llcs-part-ii-best-governance-practices\/","title":{"rendered":"Maintaining Indiana LLCs: Part II Best Governance Practices"},"content":{"rendered":"<p><a href=\"https:\/\/www.hpindiana.law\/business-blog\/maintaining-indiana-limited-liability-companies-part\" target=\"_blank\" rel=\"noopener\">Part I <\/a>of this two-part series addressed requirements for maintaining an Indiana limited liability company, including the preservation of the corporate veil, that are imposed by statute or that may be imposed through the LLC\u2019s operating agreement.\u00a0 Part II addresses recommended practices for maintaining Indiana LLCs that will help preserve the corporate veil (the liability shield that protects the assets of owners, or the assets of other related entities, from the LLC\u2019s creditors) and are simply good business practices.\u00a0 Although the failure to follow one or more of the following recommendations will not necessary subject your LLC to veil-piercing, the following characteristics and practices are common to most well operated and maintained LLCs.<\/p>\n<ul>\n<li><u>Do not use the LLC for fraudulent or other improper purposes.<\/u> Courts have very little patience with the owners of LLCs, corporations, or other limited liability forms of businesses who use them to perpetuate a fraud or to improperly hide assets from creditors, for example by transferring assets from one company to another in an attempt to hide or protect the assets from creditors of the first company. That is not to say that LLCs cannot be properly used for asset protection purposes under the correct circumstances, but once an LLC has incurred liability, transferring assets to another company or to the owners, especially if the LLC does not receive fair market value in exchange for the assets, will likely result in the company\u2019s veil being pierced to enable its creditors to reach at least the transferred assets and perhaps the other assets of the recipient.<\/li>\n<li><u>Keep the LLC\u2019s assets separate from the owner\u2019s assets or the assets of other entities<\/u>. Open bank accounts for the LLC that are separate from the owners\u2019 accounts or accounts of related businesses. Deposit all of the LLC\u2019s income into those accounts (not directly into the owners\u2019); pay all of the LLC\u2019s obligations from its own accounts; and pay none of the owners\u2019 obligations or obligations of a related company from the LLC\u2019s accounts. Generally, the LLC\u2019s assets should be used only for purposes of the LLC\u2019s business and not for the personal use of the owners. Do not pay yourself by writing checks from the LLC bank account to pay your personal obligations; pay yourself by writing a check from the business account, deposit it in your personal account, and then pay your personal obligations from your personal account.<\/li>\n<\/ul>\n<div class=\"read_more_link\"><a href=\"https:\/\/www.hpindiana.law\/business-blog\/maintaining-indiana-llcs-part-ii-best-governance-practices\/\"  title=\"Continue Reading Maintaining Indiana LLCs: Part II Best Governance Practices\" class=\"more-link\">Continue reading \u203a<\/a><\/div>\n","protected":false},"excerpt":{"rendered":"<p>Some best governance practices for operating and maintaining Indiana limited liability companies.<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12],"tags":[],"class_list":["post-1056","post","type-post","status-publish","format-standard","hentry","category-limited-liability-companies"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Maintaining Indiana LLCs: Part II Best Governance Practices &#8212; Indiana Business Law Blog &#8212; December 30, 2017<\/title>\n<meta name=\"description\" content=\"Some best governance practices for operating and maintaining Indiana limited liability companies. &#8212; December 30, 2017\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.hpindiana.law\/business-blog\/maintaining-indiana-llcs-part-ii-best-governance-practices\/\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Michael R. Smith\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"4 minutes\" \/>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Maintaining Indiana LLCs: Part II Best Governance Practices &#8212; Indiana Business Law Blog &#8212; December 30, 2017","description":"Some best governance practices for operating and maintaining Indiana limited liability companies. &#8212; December 30, 2017","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.hpindiana.law\/business-blog\/maintaining-indiana-llcs-part-ii-best-governance-practices\/","twitter_misc":{"Written by":"Michael R. Smith","Est. reading time":"4 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/www.hpindiana.law\/business-blog\/maintaining-indiana-llcs-part-ii-best-governance-practices\/#article","isPartOf":{"@id":"https:\/\/www.hpindiana.law\/business-blog\/maintaining-indiana-llcs-part-ii-best-governance-practices\/"},"author":{"name":"Michael R. Smith","@id":"https:\/\/www.hpindiana.law\/business-blog\/#\/schema\/person\/22651dd1a387f83ca7560f7eba353e29"},"headline":"Maintaining Indiana LLCs: Part II Best Governance Practices","datePublished":"2017-12-31T02:12:34+00:00","dateModified":"2023-11-28T18:36:49+00:00","mainEntityOfPage":{"@id":"https:\/\/www.hpindiana.law\/business-blog\/maintaining-indiana-llcs-part-ii-best-governance-practices\/"},"wordCount":873,"articleSection":["Limited Liability Companies"],"inLanguage":"en-US"},{"@type":"WebPage","@id":"https:\/\/www.hpindiana.law\/business-blog\/maintaining-indiana-llcs-part-ii-best-governance-practices\/","url":"https:\/\/www.hpindiana.law\/business-blog\/maintaining-indiana-llcs-part-ii-best-governance-practices\/","name":"Maintaining Indiana LLCs: Part II Best Governance Practices &#8212; Indiana Business Law Blog &#8212; December 30, 2017","isPartOf":{"@id":"https:\/\/www.hpindiana.law\/business-blog\/#website"},"datePublished":"2017-12-31T02:12:34+00:00","dateModified":"2023-11-28T18:36:49+00:00","author":{"@id":"https:\/\/www.hpindiana.law\/business-blog\/#\/schema\/person\/22651dd1a387f83ca7560f7eba353e29"},"description":"Some best governance practices for operating and maintaining Indiana limited liability companies. &#8212; December 30, 2017","breadcrumb":{"@id":"https:\/\/www.hpindiana.law\/business-blog\/maintaining-indiana-llcs-part-ii-best-governance-practices\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.hpindiana.law\/business-blog\/maintaining-indiana-llcs-part-ii-best-governance-practices\/"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/www.hpindiana.law\/business-blog\/maintaining-indiana-llcs-part-ii-best-governance-practices\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/www.hpindiana.law\/business-blog\/"},{"@type":"ListItem","position":2,"name":"Maintaining Indiana LLCs: Part II Best Governance Practices"}]},{"@type":"WebSite","@id":"https:\/\/www.hpindiana.law\/business-blog\/#website","url":"https:\/\/www.hpindiana.law\/business-blog\/","name":"Indiana Business Law Blog","description":"Published by Indianapolis Corporate Attorneys \u2014 Harshman Ponist Smith &amp; Rayl, LLC","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/www.hpindiana.law\/business-blog\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/www.hpindiana.law\/business-blog\/#\/schema\/person\/22651dd1a387f83ca7560f7eba353e29","name":"Michael R. Smith","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/secure.gravatar.com\/avatar\/095342975260becd46df795933b96309ce26cc246013b9675f2ebfbfb15aeb88?s=96&d=mm&r=g","url":"https:\/\/secure.gravatar.com\/avatar\/095342975260becd46df795933b96309ce26cc246013b9675f2ebfbfb15aeb88?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/095342975260becd46df795933b96309ce26cc246013b9675f2ebfbfb15aeb88?s=96&d=mm&r=g","caption":"Michael R. Smith"}}]}},"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/www.hpindiana.law\/business-blog\/wp-json\/wp\/v2\/posts\/1056","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.hpindiana.law\/business-blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.hpindiana.law\/business-blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.hpindiana.law\/business-blog\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.hpindiana.law\/business-blog\/wp-json\/wp\/v2\/comments?post=1056"}],"version-history":[{"count":1,"href":"https:\/\/www.hpindiana.law\/business-blog\/wp-json\/wp\/v2\/posts\/1056\/revisions"}],"predecessor-version":[{"id":2181,"href":"https:\/\/www.hpindiana.law\/business-blog\/wp-json\/wp\/v2\/posts\/1056\/revisions\/2181"}],"wp:attachment":[{"href":"https:\/\/www.hpindiana.law\/business-blog\/wp-json\/wp\/v2\/media?parent=1056"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.hpindiana.law\/business-blog\/wp-json\/wp\/v2\/categories?post=1056"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.hpindiana.law\/business-blog\/wp-json\/wp\/v2\/tags?post=1056"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}