It’s now clear that Mr. LLC is a separate person. Its cash is not your cash. Its assets are not your assets. If you mix Mr. LLC’s cash and assets with your personal cash and assets, then Mr. LLC might not be treated as a separate person. The same holds true with your other companies. Here’s what you need to do to keep things separate.
Open a bank account in Mr. LLC’s name. If you contributed startup cash to Mr. LLC, then deposit this cash in the bank account. Use Mr. LLC’s account for business purposes only. Don’t take money from it for personal use.
If you contributed startup assets to Mr. LLC, transfer these assets to Mr. LLC via a bill of sale, deed, or whatever other legal instrument is necessary to transfer the assets to Mr. LLC. Then use these assets for business purposes only.
Open up separate books for Mr. LLC and keep track of all its finances as a separate entity. If you own other LLCs or companies, those entities must have their own books.
Enter into contracts in the name of Mr. LLC. Here’s how you sign those contracts.
Your Company Name, LLC By: [signature of manager or member]
Manager [or Member if you’re member-managed]
Make it clear to your customers, suppliers, and others that they are doing business with Mr. LLC and not you personally. You should include the LLC part of your business name on things such as business cards, invoices, stationary, etc. You can refer to the business as My LLC. Don’t use the term partner; use co-member instead.
Keep Mr. LLC well fed. Make sure he has enough equity from its members (money, property, loans, assets, cash flow, and other financial resources) to pay his debts when due.
LLC to LLC Relation
Your LLC must treat your other LLCs and corporations like strangers. If they provide services to each other, they must have contracts between them with terms just like any other contract between strangers
Biennial Reports and Updates
You file a biennial report with the state of Alaska every two years to tell them and the public who owns and is in charge of your LLC. This information is on the internet. If something changes between biennial reports, you need to let Alaska know about the changes. You also need to get a business license and make sure it gets renewed.
If someone wants to sue Mr. LLC, that person can’t say “hey Mr. LLC, I’m going to sue you.” So how do you talk to Mr. LLC? That’s where the registered agent comes into play.
You designate an official person or another corporation to be Mr. LLC’s ears. This can be your attorney, a law firm, yourself, or a registered agent company. They listen to the people who need to talk with Mr. LLC about legal stuff such as summons, complaints, and other legal notices. This is an important job because they will be the one to respond to the person talking to Mr. LLC. If they ignore them, Mr. LLC could end up with a default judgment or some other legal action against it.