The Oklahoma Bar Journal September 2023

compliance, and the corporate veil is pierced. For limited liability com panies, the courts generally ask, “Are you mostly in compliance?” So if you forgot to do your annual minutes last year, all hope isn’t lost; your status may still be protected. Though you might be able to maintain liability protection if you miss some of the items below, it’s best not to leave anything to chance and, instead, it’s recommended that you visit all aspects of governance at least annually. The following are undertakings to visit every year to preserve your professional limited liability company status in Oklahoma. YEARLY REVIEW

combined the benefits of both cor porations and partnerships. The idea gained popularity because it provided limited liability protec tion for owners while avoiding some of the tax burden and for malities associated with corpo rations. Following Wyoming’s lead, other states in the U.S. began enacting their own limited liabil ity company statutes throughout the 1980s and 1990s. Limited liabil ity companies were introduced in Oklahoma in 1992. Through Oklahoma case law over the last 30 years, we’ve come to learn that instead of the all-or nothing approach to governance requirements for corporations, Oklahoma courts typically look at the same list of factors and do balancing tests instead. For a cor poration, if you miss any piece of corporate governance, you’re out of

joint-stock companies with lim ited liability for their investors. Up until 1977, if you wanted asset protection for your business, your primary option was to form some type of corporation. This was all well and good, but you paid an arm and a leg in taxes, and cor porate governance requirements were very strict. If you got one governance measure wrong, it would be enough to “pierce the corporate veil,” and suddenly, your personal assets could be gotten at by creditors of your busi ness. These high standards and costs eventually led to the birth of the limited liability company. In the United States, the first modern limited liability com pany legislation was enacted in Wyoming in 1977. Wyoming’s law allowed for the creation of a new type of business entity that

Statements or opinions expressed in the Oklahoma Bar Journal are those of the authors and do not necessarily reflect those of the Oklahoma Bar Association, its officers, Board of Governors, Board of Editors or staff.

SEPTEMBER 2023 | 15

THE OKLAHOMA BAR JOURNAL