For many business owners, the least exciting aspect of running a company are the so-called "corporate formalities." One of the great benefits afforded to a company under the law, is the fact that a company exists as a separate legal "person," and the owners of that company are generally shielded from liability of the company's actions. In fact, any losses suffered by an owner during a dispute are typically solely based on that individual's financial investment in the company.

However, as they say, you can't have your cake and eat it, too. The tradeoff for the benefit of limited liability is the owners maintaining corporate formalities. So, what are corporate formalities? While the laundry list of corporate formalities changes slightly depending upon what type of business entity is in play, as a general guideline, the following are some examples of core corporate formalities: