When many people think of asset protection, they only consider this financial planning tool for their own personal assets or shared assets within a family. However, assets protection is also very important for businesses, especially if you are starting your own business, because numerous assets can be jeopardized without the right protections in place.
Here is an overview of the protection that legal entities can provide for business and assets protection that is crucial for business owners. This is one of the many services that we provide at Alatsas Law Firm to help you preserve what you’ve worked so hard to build.
Business Assets That Can Be Jeopardized
If you own a business and someone files a lawsuit against you, you could be faced with paying a substantial settlement or trial fees. If these lawsuit costs are high or if the lawsuit damages your reputation, you could even lose your entire business after being sued.
Some of the many professional liability threats that affect business owners include employment discrimination lawsuits, trademark infringement lawsuits, sexual harassment lawsuits, malpractice claims, and breach of contract claims. Business assets that you stand to lose include cash, product inventory, company vehicles, furniture, stock, patents, and investments. Without asset protection and the right company structure in place, creditors could even come after your personal assets as a result of a business lawsuit.
Who Can Sue You Within the Business Realm
Assets protection business partner issues can arise in a company because business partners can sue each other based on a claim of negligence or misconduct. This is also true for business associates, owners of other businesses, and any of your customers who believe they have been wronged by your company. You can also be sued as the corporate officer or director of a business if you are held liable for corporate liabilities. This can happen even if you have established limited liability provisions in your corporation.
Shareholder Susceptibility to Lawsuits
Something that many people don’t realize is that shareholders of a business can also be sued by other shareholders. Federal law allows shareholders of companies to sue their corporate directors for acts that harm a company of diminish the value of the company’s shares. This is because corporate directors have fiduciary duties to maintain. However, the business judgement rule protects a director from liability if he or she acted in good faith but simply made a bad business decision.
Preventing Large Amounts of Monetary Loss
Fortunately, there are many things that you can do to protect yourself and your business in case a lawsuit is ever filed against you. Initially, it is strongly advised to seek legal counsel to establish the right kind of business entity to separate your personal assets from your professional assets, such as a general partnership, sole proprietorship, corporation, or limited liability company. It also is beneficial to have insurance to protect your assets and store money away in retirement accounts for your advantage. Other ways that we can help you protect your assets include asset protection trusts, revocable and irrevocable trusts, guardianships, and living wills and trusts.
Alatsas Law Firm provides asset protection services to individuals in all income brackets and who run businesses of all sizes, types, and stages of development. We strongly recommend safeguarding what you have now to prepare for the future, so don’t wait another day to contact us for a free business consultation. This is a proactive way to prevent large amounts of monetary loss in an unpredictable and litigious world.