If I have commingled my personal and LLC accounts and know that this compromises the corporate veil, how can I correct this?

I will have separate accounts in the future, but the transactions showing the commingled actions will always be there in my bookkeeping system. Will I ever be free of the potential piercing the corporate veil anytime in the future?

Asked on July 7, 2014 under Business Law, Nebraska

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 6 years ago | Contributor

To best insulate yourself from the threat of a creditor, etc. piercing the corporate veil, make sure you have thoroughly documented which money was yours and which was the company's; make sure you did not claim any tax benefit(s) to which you were not entitled; and to the extent that you used any company money for your personal expenses, repay it, and document the repaying. You want to be in a position to show you may have made bookkeeping errors at one point by comingling, but that you have not actually taken any company money for your own, in that anything you inadvertantly took, you repaid; also that even if you mistakenly kept all the funds in the same account(s), you can track accurately whose funds are whose and the source of all funds.


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