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4 Important Steps to Protect Personal Wealth From Business Liabilities

Asset Protection, Business PlanningNo Comments

asset protection 150x150 4 Important Steps to Protect Personal Wealth From Business LiabilitiesEvery business owner makes the decision to assume some portion of risk when they operate their own business, but no one wants that potential risk to affect their personal wealth.  Unfortunately, there are all too many business owners who neglect to implement the correct asset protection strategies to firmly separate business risk from personal wealth.

There are a number of important steps business owners should take to make sure personal wealth is protected from business liabilities, including:

Choosing the right business entity.  Setting your business up as a corporation or limited liability company (LLC) will better protect you in case of a business lawsuit than if you establish your business as a sole proprietorship.

Keeping finances separate.  Business and personal finances must be kept totally separate and the correct business name (not your personal name) should be used on all business documents, including property titles, contracts, etc.

Complying with all rules and regulations.  Taking shortcuts can come back to bite a business owner if someone suing you can prove you have been negligent or have acted fraudulently.

Having the right insurance.  If you own your own business as well as the building that houses your company, you will need to have different insurance policies for both.  Having the right kind of business insurance makes your own personal wealth less of a target in case of a business lawsuit.

To learn more effective business protection strategies, contact our Costa Mesa law firm.