The answer is yes, but not always. Generally speaking, a corporation will shield its owners (stockholders) and its officers and directors from personal liability. However, in order for the shield to operate properly and effectively, the corporation must take certain steps as regards its corporate existence. A few key points (this is not a totally inclusive list)
1. Make sure that the corporation’s annual fees/dues are timely paid;
2. Keep separate books of account for the corporation-bank accounts, check books, accounting, credit cards;
3. Do not use corporate funds to pay for personal expenses;
4. Personal loans to the corporation by its shareholders, officers, directors, etc. should be fully documented as loans;
5. Call annual meetings of the board of directors and shareholders;
6. For major events in the life cycle of corporation, consider calling special meetings of the board of directors and/or shareholders;
7. Make sure that when you sign documents on behalf of the corporation, you always use your job title and position to sign, e.g., “As President” As “Vice-President, etc.
This is not an exhaustive list of all steps that you should take, but should be considered as a series of basic steps to protect the benefits of the corporate shield. We are ready to guide and counsel you as to how to keep your corporate shield intact.