Asset Planning is a critical part of the business world and you need to ensure that you are covered in the event of a divorce, lawsuit, and judgement and in the untimely event of your death. The following are ten rules to keep in mind when it comes to asset protection planning.
1. Have a defense strategy in mind in the event that you are sued
If you don’t have an actual plan in the unfortunate event that you are sued, it will be too late to take the proper course of action once someone decided to sue you. Plan for several worst –case- scenarios so you will not be left in the dark if the time arises.
2. If you have a two-person partnership, it only doubles your risk.
Keep in mind that if you are in dual-partnership, that your mistakes are your business partner’s mistakes too and vice versa. This means that you are both liable for the others actions and errors. You could lose everything if your partner makes a crucial mistake and ends up being sued.
3. Always use a registered corporate entity
Some business owners are unaware of the fact that there is great potential for the risk of losing all of your property and assets under your name. It is strongly advised to place all of your assets with a registered corporate entity. These include:
● C Corporations
● S Corporations
● Limited Liability Companies (LLC)
● Limited Partnerships (LP)
4. Make sure that you meet your annual requirements to keep your legal protection intact.
Ensure that your company registration is current. As well, you need to hold annual meetings and always keep accurate minutes of these meetings. Another helpful piece of advice is to never sign your name on any business-related documents in your name to avoid legal troubles down the line. This will keep your personal assets apart from your business assets.
5. Make sure that you have a comprehensive and up-to-date commercial insurance policy
A current and detailed commercial insurance policy can keep you from losing your property in the event of a lawsuit or judgement. These are the things that need to include in your policy:
● Trespassing on your property
● All liability insurance should cover any third parties on your business property
● Workers Comp Insurance for your personnel
● Rates for “increased cost of construction” should your property become damaged
6. Watch out for incorporation scams
There are quite a few business scams in the works now. It is important to keep this in mind as you are dealing with prospective clients and other businesses. Always check your source to avoid such scams as they could be very costly and you could end up losing your business as a result.
7. Protect all of your business asses with a business entity
An LLC, or Limited Liability Company, is the best way to protect your business assets. This would protect you in the event of a third party lawsuit.
8. Keep in mind that sole proprietary is a risky business
If you are the sole proprietor of an establishment and are involved in a lawsuit, your personal assets are not protected, nor are any of your financial accounts. In this event, a judgement can be placed against you and you could lose everything.
9. Always keep your business assets separate from your personal assets.
Make sure to insulate your personal assets from your business assets. If you are a sole or general partnership and your business is not a registered entity, you could lose your personal assets in the event that a judgement is passed against you.
Keep these points in mind when it comes time for asset planning and you should not have any problems in the future.
Should you have any questions regarding how to protect your personal or business assets, feel free to call the Titanium Asset Protection at (714) 827-9955. With our years of experience in asset protection, we will be able to answer any of your questions and concerns. Call us today for a free and confidential consultation.