There’s nothing quite like owning a business. Whether you are considered a small business owner or a business owner; protecting your interests in the business and other assets should be at the top of your to-do list at all times.
With more than 29 million small businesses in the country, according to the Small Business Administration, you should take a page out of their book and protect your business at all costs. This includes speaking with an experienced business attorney from Power Law Firm LLP who knows the laws of your state and can guide you in the right direction when it comes to protecting your business.
It’s important that you separate your business and personal interests or else it could be a recipe for disaster. You don’t have to formally define the structure of your business to keep your assets separate. This is easily done by having a personal bank account and a business bank account that can be used for expenses. It’s also smart to have separate credit cards. These are requirements when you file for an LLC or other corporations.
Many small businesses get off the ground by operating as a sole proprietorship. This can only last so long as the legal risks will begin to mount, especially if you utilize contractors or hire an employee. You can open yourself up to lawsuits if someone gets injured or you choose not to work with them anymore. You can choose from any of the following business structures:
- C Corp: Separates business and personal assets. Shareholders and a board of directors will be required.
- Limited liability corporation (LLC): The profits of this type of business are reflected on the tax return of the business owner. You can protect yourself from personal liability when registered as an LLC.
- General Partnership: An agreement between no less than two people. Each owner holds personal liability for the debts of the business.
- S Corp: Profits for the business pass through to the owners or shareholders and are only taxed one time.
You cannot overlook business insurance. Consider business insurance just as important as health and life insurance. Leaving your business uninsured can lead to lawsuits against your personal and business assets. Even though you are protected from some liability when incorporated, but business liability coverage can provide you with a lot of protection.
A business attorney will be able to review your company’s operations and determine if you comply with all of the laws and requirements in place for your type of business structure. Examples of compliance for businesses include the following:
- Paying business taxes
- Paying state and local fees
- Filing specific documents
- Maintaining accurate and thorough business records
It is possible that you could be held personally liable if your business fails to comply with state and federal regulations. For example, if you do not file the appropriate business taxes, you could be held liable personally.
Asset protection is a proactive process and not a reactive one. It is impossible to protect your assets after a claim is filed against you or your business. However, you have all the power in the world to protect your assets when you plan ahead. Be proactive with your business. Protect your personal and business assets before it’s too late.
Call Power Law Firm LLP to Schedule a Consultation Regarding Your Business Today
The experienced business attorneys at Power Law Firm LLP can answer all of your questions regarding business structure, personal liability, and protecting your assets. Contact our office today to schedule a consultation. The more you plan, the less likely it is that you or your business will face lawsuits or other liability issues.