After working with Silicon Valley start-up companies for 30 + years, it may seem axiomatic, but bears repeating.
Incorporate first, please. I get calls from budding entrepreneurs who want to buy insurance for their nascent enterprise and discover they haven’t yet incorporated. Don’t use insurance as a substitute for the “corporate veil.” The corporation is an asset that should be protected by a well crafted insurance program, but first create separation between your business and your house!
Second, maintain your corporation. I have heard of only one instance in my career when a bankruptcy judge had pierced a corporate veil to expose a family’s personal assets to the creditors, and it was because they “didn’t act like a corporation.” They didn’t have their Board of Directors Meetings, and annual Shareholder meetings, and keep notes of those meeetings as required by law.
This is foundational for any entrepreneur in the management of corporate and personal risk. A good corporate attorney will prove an invaluable advisor to your business, and often will help with keeping the required meeting notes.
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