Did you know roughly 20% of all small businesses shut down after their first year? Only half make it beyond the five-year mark.
How can you ensure your business’ survival and prevent the loss of everything you own?
This is the concept of Asset Protection. It banks on the idea of guarding your wealth against creditor claims. By protecting your assets, you limit the creditors’ access to certain valuables while operating within the bounds of debtor-creditor law.
For business owners, here are some thoughts on how you can protect your assets:
1. Have a Business Entity
One method to help you protect your assets is to choose the right business entity. Know which entity you are using. Each one has different coverage and details on which properties and assets are at risk.
For example, Sole Proprietorship puts your personal assets at risk when sued. Setting up an entity, such as a Corporation or a Limited Liability Company (LLC), would be your first step in protecting your assets. Make sure to check these entities and determine which one best suits your needs.
Other forms of entities include General Partnerships, Limited Partnerships, Non-Profit Organizations, and Corporation. Some of the rarer forms include Limited Liability Partnership and Limited Liability Limited Partnership.
2. Set Your Insurance
Another important step for protecting your assets is setting up insurance. Regardless of the type of business, you will need to invest in insurance and have it as part of your budget.
One insurance, in particular, is business insurance, as it gives you the ability to take care of incidents in your business.
Having another insurance to act as an umbrella is also a good suggestion. But this doesn’t mean you should throw caution to the wind as umbrella insurances won’t cover fraudulent, criminal, reckless, or negligent actions.
3. Get Legal Support
It’s a good move to have legal guidance to find other ways to protect your assets. There are other details you may not be aware of or have overlooked. When in doubt, get legal support in these kinds of matters.
This is where legal support from experts like Anthony S. Park comes in. You can inquire for advice on how to secure your property, minimizing your exposure to failure.
What you need to do is to plan for the future. You are protecting your assets to prevent plaintiffs from taking what you own in the event that you are sued.
Consider a legal business succession plan while you are at it. You never know when it’s time to let go of the company and hand it to the next generation of leaders.
Plan Ahead, Protect Your Assets Today!
Think carefully about how you should protect your assets from loss. Make use of the business entity type, insurances, and every possible safeguard at your disposal. Have a plan to ensure that your assets are not taken away from you.
But why stop here? We also have other topics you can peruse.
Don’t hesitate to check out our other blog posts and guides. Here’s one about the common OSHA Violations your workplace needs to avoid.