Every business owner makes the decision to assume some portion of risk when they operate their own business, but no one wants that potential risk to affect their personal wealth. Unfortunately, there are all too many business owners who neglect to implement the correct asset protection strategies to firmly separate business risk from personal wealth.
There are a number of important steps business owners should take to make sure personal wealth is protected from business liabilities, including:
- Choosing the right business entity. Setting your business up as a corporation or limited liability company (LLC) will better protect you in case of a business lawsuit than if you establish your business as a sole proprietorship.
- Keeping finances separate. Business and personal finances must be kept totally separate and the correct business name (not your personal name) should be used on all business documents, including property titles, contracts, etc.
- Complying with all rules and regulations. Taking shortcuts can come back to bite a business owner if someone suing you can prove you have been negligent or have acted fraudulently.
- Having the right insurance. If you own your own business as well as the building that houses your company, you will need to have different insurance policies for both. Having the right kind of business insurance makes your own personal wealth less of a target in case of a business lawsuit.
Having a business attorney that understands the individual needs and unique circumstances of your company is key to helping your business thrive and prosper. If you are interested in learning more about legal protection strategies for your business and how we work with you as a partner in protecting your company, call us today to schedule your comprehensive LIFT™ (legal, insurance, financial and tax) Foundation Audit.