Many people form a Corporation and think “That is it; now I can enjoy the asset protection, tax savings and benefits a Corporation provides.” But without proper corporate formalities…. you are risking your Corporation's protection, the asset protection and tax savings provided by a properly maintained corporate structure.
The frightening truth is, every one of the many benefits you get from owning a Corporation could disappear if you are not documenting your actions.
It comes down to your corporate records. If they are not up-to-date, in order and squeaky clean, you will lose your corporate status and then all your personal assets will be at risk.
In the eyes of the law, it doesn't matter if you are the sole person on the board of directors, the only officer and the only employee; small closely-held Corporations are under the same legal obligations as big private companies. In fact, it is even more critical that you show separation between yourself and the company.