The Startup Guide for Asset Protection

Protect Your Self

The daily tasks involved with running a company can leave most business owners with their hands completely full. Unfortunately, asset protection is an aspect of starting a business that often gets overlooked as a result. This will be your guide to finding the right fit for you and your company when it comes to protecting your assets.

What is Asset Protection?

Your company owns certain items -- the chairs your employees sit in and the tools that are used to perform the job. Cash, ideas, and art are also assets. Asset protection ensures that all of these things will remain protected in the event of a lawsuit, filing taxes, or handing the business down to a successor. Owning a business is hard work, but making sure you protect your assets should be a priority.

Where To Start

Follow these steps to protect your assets:

  • Make a list of assets.
  • Create a protection plan.
  • Look for any flaws in your plan and fix them.
  • Do your research.
  • Put your plan into action.
  • Lawsuits

    We live in a world where if assets aren’t protected, a business could fall victim to a lawsuit. Being a sole-proprietor comes with it’s advantages -- like being able to deduct most business expenses come tax-time. The downside? Your personal bank account and even your house could be up for grabs to a plaintiff.

    An FLP, or Family Limited Corporation or an LLC, or Limited Liability Corporation are two ways to keep personal assets safe in the event of a business lawsuit. Another good way to protect your company’s assets is by creating multiple entities. This is a good strategy because the only way a plaintiff will be able to take from an LLC or FLP is by using a charging order, which is very costly. Multiple entities cost more, but will create more protection.

    When deciding whether or not to create multiple entities, consider what you have to lose. Many small businesses will be fine as just one entity, but if you use any vehicles or real-estate, you might want to consider separating. This just makes it harder for a potential plaintiff to get to your assets, making a lawsuit less-attractive.

    Taxes

    Every small business should seek the help of an accountant. Tax codes are complicated and you could end up overpaying when you file if you don’t have a good one. One way to avoid paying taxes on capital gains is to create a Charitable Remainder Trust, or CRT. A CRT is a charitable organization that is recognized by the IRS and does not have to pay these taxes. However, keep in mind that assets can’t have debt and the profits are not able to be had as a lump-sum.

    Protect Yourself

    Any Ideas or art will need to be protected - get appropriate patents. You should have a plan in place to keep your assets out of probate or from becoming subject to estate tax if a business owner dies and the company changes hands. Be wary of pre-packaged policies and instead make a protection plan that fits your needs.

    Look to American Society For Asset Protection, true leaders in the professional asset protection industry, to properly guard your assets from lawsuit & litigation. Connect with them online on Facebook - American Society For Asset Protection or LinkedIn. Learn More On The ASAP YouTube Channel. Review the American Society For Asset Protection on BBB

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