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Asset Protection Considerations for Business Owners

In this blog, we talk about four asset protection strategies business owners need to consider.

#1: Pick the Right Business Entity

Although there are numerous tax-planning considerations, operating your business as a sole proprietorship isn’t the wisest choice if you are trying to protect your personal assets. If you decide you want sole proprietorship, you can end up losing your assets if you lose a lawsuit. You should establish an entity, like an S corporation or limited liability company (LLC), to protect your assets.

#2: Projecting a Corporate Veil

After you set up your business entity, you need to open and maintain a separate bank account and checkbook. Make sure you use the company name on all documents and keep all corporate records. You should also title the business property in the name of the company.

#3: Always Use Proper Contracts

If you want to avoid losing your assets over negligent acts or fraud, you need to make sure you have strong lease agreements for your rentals and that the titles for all property and equipment necessary for business operations is in your company name. Never rely on email when making the terms for agreements with subcontractors, and always ensure they are licensed, bonded, and insured.

#4: Purchase Business Insurance

When calculating your startup budget, it is important to set aside funds for business insurance. One option you should consider is umbrella insurance. However, umbrella insurance doesn’t cover fraudulent, criminal, reckless, or negligent action.

Speak to a Business Law Attorney Today

No matter if you need help starting your new business or you are dealing with a complex legal matter, our team of experienced lawyers is here to assist you and make sure your rights and interests are fully protected. Stop by our office today to discuss the details of your case with a seasoned legal professional.

Call our law firm at (770) 766-5811 to schedule your free consultation with a member of our team.