One reason  for choosing to operate as an LLC is that it affords its owners the same basic protection against personal liability as does a corporation, but with less paperwork.  However, if some formalities are not observed, limited liability might never be achieved, or may be lost.   In order to keep the “limited” in a limited liability company, the following are some things that should be kept in mind when operating your business: Treat The Company as Being Separate From Its Owners.  The LLC should be treated as a thing separate from yourself–even if you are the sole member.  Business must be done in the company name at all times.   The business should take care to hold itself out to the public at all times as a limited liability company. All contracts, letterheads, invoices, statements, advertisements, business cards and telephone listings should use the limited liability company’s registered name (or its registered trade name), including the designation "LLC." Distinguish Between Business and Non-Business  Property.   It is important that the property of the LLC be clearly understood to belong to the company and not to individual members or managers. Financial accounts must not be treated as another "pocket" of its members.  Transfers of property to the company should be clearly documented.  Property that the LLC purchases should be purchased on the company checking account or credit card, not the members individual accounts, unless the transfer is clearly documented Observe Formalities.   The LLC must  adopt and follow an adequate operating agreement.  All required formalities must be followed and documented in the Company’s records, including members and managers meetings.   If meetings are held by consent, the consents should be in writing and kept with the Company’s minute book.  A system should be kept in place to file required reports with the Colorado Secretary of State. Qualification in Other States.  It may be necessary to register your LLC to do business in other states, depending on the nature and extent of what the LLC does there.  Failure to register in another jurisdiction can sometimes result in personal liability. The firm provides preventative law consultation and services to Colorado small business to help you get the most from your LLC or closely held corporation.