By: Jordan K. Rolfe

            There is a reason you formed your limited liability company or corporation…it serves as protection from personal liability.  It is smart to limit personal liability.  However, your new entity comes with specific requirements, which, if not followed, may expose you to personal liability despite the entity’s existence.

This is a great time of year to review your company’s corporate compliance with Utah law. Have you filed your Annual Report with the Utah Division of Corporations? If not, you may be surprised to learn that your corporation might have been administratively dissolved. How about that annual meeting required by statute or the meeting minutes?  Is your entity in need of corporate resolutions? Have you changed your statutory agent or moved to a new location?  These are some of the seemingly unimportant details that cause legal headaches for your company.

Although simple non-compliance issues may be remedied in likewise simple fashion, I see too many instances of big problems resulting from simple inattention to corporate compliance requirements. For instance, a company can lose the right to use its own name or may be unable to maintain a lawsuit.  Moreover, a minority member or owner may bring a lawsuit against the company and the other owners.

Perhaps, most frightening, a creditor of the company could seek to pierce the corporate shield and pursue claims against the owners personally if they haven’t paid adequate attention to corporate compliance issues.

Tellingly, most legal problems your business will face could have been prevented with proper attention paid to the requirements related to corporate compliance.  Although you may not have a law degree or legal background, you, as the business owner, principal, or officer, are required to know and ensure that the compliance requirements are fulfilled.  If you are unsure of what needs to be done and do not have time to become an expert on corporate law, you need to make sure someone responsible performs the compliance work for the company.

You may consider hiring an attorney to help you with the compliance requirements.  In many cases, it may cost less to hire an attorney to help when you take into account the time spent researching the law by someone without legal expertise.

In a relatively short meeting with an attorney, you will be able to discuss and review your company’s legal status and receive suggestions on ways to protect your company.  Regardless of how you go about ensuring compliance, make sure compliance is high on your company’s priority list.

       Jordan K. Rolfe is an attorney with the law firm of Hansen Wright Eddy & Haws, P.C. in Utah County, Utah.  His practice includes business law and litigation.  He can be reached at 801-443-2380. 

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