Many businesses are forced to close their doors each year due to good planning. For your company to survive the test of time, consider using these techniques to protect your business assets.
Put Some Assets in Spouse’s Name
One spouse might have a riskier lifestyle or occupation. In that case, to protect the assets, it’s wise to put some of the assets in the other person’s name. That way, the other spouse’s creditors will not reach the assets owned by another.
In that case, to protect the assets of a given company, you should consider moving the most valuable ones to the name of the other spouse with a less risky lifestyle of occupation. These are the situations in which you can make good use of postnatal or prenuptial property agreements.
Use General Partnership
Two or more individuals run a single business together with a general partnership. This type of relationship can either be oral or written. It’s a tool that can protect the company’s assets in case a risk occurs. But this method might not be 100% reliable since each partner is accountable for every debt of other partners.
It even gets worse because other partners might act on behalf of the rest of the partners without their knowledge or consent.
The good thing with the general partnership is that if you have debt outside the business, your creditors cannot collect any assets because they don’t belong to you as a single person.
Seek Umbrella Insurance
The most reliable way to protect your company’s assets is to go for an insurance plan. As an entrepreneur or a business owner, you have many options for robust insurance plans to protect your business.
First, you can choose the business automobile policy (BAP). This one will save your business vehicles and even issue additional liability coverage.
Umbrella insurance is another option you can go by. This type of insurance covers any other thing that your other insurance policies might have left out. It comes in handy when you want to stop creditors from seizing your valuables when different policies cannot cover settlements.
Opt for Business Entities
You shouldn’t mistake adding your business assets to your assets. Instead, you should protect your assets via business entities, such as aSpecial Purpose Vehicle (SPV). This is a type of entity that comes with a particular limited purpose.
SPVs are primarily created to shield assets and separate liabilities of a subsidiary or parent company. This is a great way to protect your assets since placing them in a single bundle can leave them vulnerable, and you can lose everything if a risk occurs.
Suppose you don’t have enough knowledge on how to create business entities. You can ask an expert to help you learn how to craft one.
Use the Right Contracts and Procedures
One of the easiest ways for creditors to break your corporate veil and launch an attack on your assets is one you act fraudulently and negligently. But this is a mistake that you can easily avoid by coming up with proper lease agreements for your rentals, putting equipment and properties in the company’s name, and creating subcontractor agreements for each of your contracts.
other valuable tips from our business blog (new win):
Suppose you want to create a good relationship with a customer, investor, or another business, the terms should not be sent via email. Also, you must never hire anyone to operate under the table. Try to normalize working with insured or bonded professionals to help improve your business.
This applies to all asset protection specialists, contractors, tax and legal advisors, and repairers. By doing that, creditors won’t be able to burst your corporate veil and attack your valuable assets.
It’s possible to protect your assets by following the tips in this post. Note that while a general partnership might protect your help, it might not be 100% effective since the partners can operate independently without your knowledge. But you can do great by seeking insurance and opting for business entities.
Image Credit: protect your company assets by Pixabay
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