As a business owner, it is essential to have an asset protection strategy in place so that you can protect your personal assets and ensure that they do not get caught up with your business. Without the right asset protection strategies in place, if your business doesn't succeed, you risk losing your assets as well as your business.
#1: Set Up Your Business Right
One of the best ways to protect your personal assets is by structuring your business the right way to begin with. It is common for many business owners to run their business as a sole proprietorship when they get started. However, that is not the best way to keep your personal assets safe. As a sole proprietor, if your business is sued, you could lose your personal belongings.
Instead, even if you are the only employee, you are going to want to structure your business as either a limited liability company (LLC) or as an S corporation. Both of these structures will help to create more separation between your business activities and your personal life.
#2: Keep Things Separate
It is not enough to set up your business correctly. You need to make sure that you don't mix your personal and business actions together. You need to have a bank account and credit card with your business name and never use it for personal matters. When doing business, from setting up utilities to any contract you sign, be sure the paperwork has your business name and not your personal name on it.
#3: Use the Right Procedures
Third, it is essential to do things the right way. Don't work with unlicensed or unbonded professionals; doing so will put your business at risk, which could also put your personal assets at risk. You are going to want to work with professionals for all of your business needs.
#4: Set Up a Trust
If you want to protect your assets, consider setting up a trust. Your trust will own your assets instead of you as an individual. You can put a wide range of things into a trust, from your home to your vehicles to your bank account. Using a trust is a great way to create another degree of separation between yourself and your business and is a great way to protect your personal assets for your family.
As a business owner, you need to go through additional steps to protect your personal assets. Set up the right legal structure, have dedicated business accounts, use your business names on all contracts, and set up a trust to further protect your personal assets.
For more information, contact an asset protection professional such as Revolutionary Financial.
When my card was declined at the grocery store a few months ago, I realized my financial situation had hit rock bottom. Instead of ignoring the problem, I decided to meet with a financial counselor to see what I could do to make things better. I talked with him about how to handle unplanned expenses and how to budget for my day-to-day life. It was incredible to learn more about money, and now I can proudly say I am living within my means. I decided to make this blog for anyone that struggles with financial planning so that you can turn things around.