As a contractor, you probably have chosen to operate your
business as a corporation or limited liability company (LLC).
Unlike sole proprietorships, such legal entities protect company
owners from personal liability. Given the risks inherent in the
roofing contracting business, you would be foolhardy not to protect
yourself legally from potential personal liability. But merely
forming a corporation or LLC is not enough.
The corporate veil derives from a concept that a corporation is
a separate and distinct "person" under the law and, as such, has
the same rights and responsibilities as any other person. If a
corporation is a separate person, its owners should not be
responsible for the corporation's liabilities unless the owners
expressly agree to accept personal liability as may be required
when seeking bonding from a surety or line of credit from a
To preserve this theory, a corporation has to comply with
various legal requirements. Otherwise, it may be possible for a
creditor to "pierce the corporate veil" and force a corporation's
shareholders to pay the corporation's obligations, which, of
course, defeats the purpose of establishing the corporation...
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