Corporate and LLC Law
Our corporate and LLC law practice area deals with the formation, structure, and operation of business entities, services that are complementary to our business law and commercial transactions practice area. The two areas are also connected by the common thread of contract law and contract drafting, areas in which our lead business attorney, Michael Smith, has acquired extensive experience and skill, beginning with the years he spent in the commercial transactions and securities groups of the Eli Lilly and Company law division. From 2010 to 2012, Mr. Smith taught contract drafting to law students as an adjunct professor at the Indiana University Robert H. McKinney School of Law. He also taught a continuing legal education seminar on business contracts, and he developed and taught a multi-day training course in contract law and negotiations for Lilly's global procurement organization.
Although there are several potential forms for business entities, the vast majority are either corporations or limited liability companies, both of which provide for limited liability for the owners of the company. However, neither a corporation nor a limited liability company offer absolute protection. In some circumstances, a court may “pierce the corporate veil” and hold either the shareholders of a corporation or the members of an LLC personally liable for the obligations of the business. One of our goals is to help our clients avoid that possibility.
There are a number of factors that a court takes into account in deciding whether to pierce the corporate veil, one of which is whether the owners of the business have observed the required corporate formalities. For example, a court may look at corporate records to determine whether a corporation has a board of directors, whether shareholder meetings have been held and minutes recorded, and whether the corporation has written bylaws. All those are formalities that are generally required of corporations under the Indiana Business Corporation Act, and failure to observe them is a factor that increases the possibility of the corporate veil being pierced and the shareholders held personally liable for the debts and liabilities of the business. In contrast, the Indiana Business Flexibility Act establishes very few corporate formalities required for LLCs (see our blog article for a discussion of them), which means there are fewer opportunities for required corporate formalities to be neglected, which in turn reduces the possibility (however slightly) that the corporate veil will be pierced. That is one reason why, everything else being equal, we favor LLCs over corporations for our clients who are business owners.
Please see the following practice areas to discover other ways that we serve our clients – and that we may be able to serve you.