The sample Action by Voting Members and Managers form (Sample) is available for free to download, customize and print for your small business, organization.
Every action by your small business or any other type of business entity should always be properly documented and authorized in order to avoid the application of the theory of piercing the veil of limited liability.
This is a very simple form below but it can accomplish these purposes and includes:
- Company Name
- Title of Form
- Section for Action Being Taken with this statement: “The undersigned, being all of the Voting Members and Managers of ____________, do hereby take the following action…
- Section Requiring all Parties to Authorize (Printed Name, Signature and Date)
What exactly is Piercing the Veil of Limited Liability?
Piercing the veil of limited liability is when a small business or business entity has a liability risk when enacting an asset protection plan.
In order to avoid the day in and day out liability risks when enacting an asset protection plan, a small business owner has to pay very close attention to their record keeping and their initial capitalization to stay clear of the doctrine of “piercing the veil” of limited liability.
The veil is the shield of limited liability that stands between the small business owner of a limited liability company (LLC) or corporation and the small business’s creditors. Because of the very important shield created when you formed your small business, the small business’s creditors can only seek payment out of the small business assets.
When the veil is pierced, the small business’s creditors can reach the small business owners personal assets outside of the organization. In short, limited liability, probably the most important attribute of an LLC or corporation, is lost.
What exactly is Limited Liability?
When you are choosing an organizational form for your small business, one of the most important things to consider involves the concept of limited liability. Only in the corporation and the LLC form do all of the business owners enjoy full “limited liability” in all states.
It’s the business owners who enjoy limited liability: The owner’s liability for the business’s debts is limited to what he or she has invested in the business (business’s assets).
Click on the link to download the sample voting members and managers form below:
Action by Voting Members and Managers Form