Control your personal finance   free website content | contact | privacylink partners
Home » Business
Money articles

» Personal finance
» Credit cards
» Saving money
» Debt elimination
» Budgeting
» Investing
» Business
» Real estate
» Making money
» Miscellaneous
» Career
» Loans
» Promote your business
» Insurance
» Bankruptcy

» Archive

The secret to protecting your business assets

Regardless of the type of business you conduct, there is a significant risk of being sued in our litigious society.
Lawsuits can range from claims of negligence to defective products to disputes with employees. Incorporating is a means of guarding against these potential threats.

Single Incorporation - Protecting Your Personal Assets

Incorporating your business is a method for creating a legal wall between your personal assets and business. Any judgment against your business will not impact your personal assets.
While your home, savings, stocks, etc., are protected, what happens to your business? If a judgment is rendered against your business, the business assets are as good as gone. This doesn’t have to be the case.

Double Incorporation Strategy - Protect Your Business Assets

Many businesses can benefit from pursuing a double incorporation strategy. The strategy is designed to address the situation where a business has significant assets that are exposed to litigation risk. If you incorporate your business, it is all well and good that your personal assets are not at risk. But what if your business has a number of high value assets such as manufacturing machinery, office equipment, popular domain name, custom software or other items? Merely incorporating your business will not protect these assets because they are owned by the business entity.
Since a successful lawsuit would result in a judgment against the business entity, all assets of the business could be seized as part of the judgment. In short, you lose your machinery, office equipment, intellectual property or any other item of tangible value. The double incorporation strategy prevents this scenario.

As the name suggests, the double incorporation strategy involves the creation of two business entities. The first is your "at risk" business that interacts with your customers or clients. The second entity, a "holding corporation", is then created to own the valuable assets of your business.
This holding corporation then leases the relevant business assets to your "at risk" entity. If the "at risk" entity is sued, the holding company merely recovers its assets and the plaintiff is forced to settle for pennies on the dollar because the "at risk" entity has few assets. In essence, the plaintiff wins the battle, but loses the war.

Most people know that a business entity can be used to create a protective shield for their personal assets. If your business has high value assets, now you can use this double incorporation strategy to protect those assets as well.

About the author
Richard Chapo is the lead attorney for the law firm http://www.SanDiegoBusinessLawFirm.com - a firm providing legal advice to California businesses. This article is for general education purposes and does not address every facet of the subject matter. Nothing in this article creates an attorney-client relationship.

Search CashBazar

Google
 
Web www.cashbazar.com


Latest money articles

» Controlling the price changes in futures markets
The lock-limit is one way that the markets can be controlled.

» How much will price changes effect stock trading?
Price elasticity is an economics term that refers to the way that price changes of stock can affect the demand for that stock.

» Large volume trading in steps
Program trading is a term that is also used in at least two different (though similar) meanings.

» How many stock options are available?
Open interests are not a feature of all stock market trades. In fact, open interests are calculated based on options and futures trades.

» Protect your portfolio from large losses
If you are worried about the stock market, then you might want to consider portfolio insurances.

» Insure your investment without limiting returns
Are you looking for a way to trade on the stock market without having to deal with all of the risks?

» Regional funds explained
Increase your portfolio diversity with funds from other regions.

» What is a derivative?
Invest in commodities without buying the commodities themselves.

» What is an option?
An option is an agreement that a commodity or stock will be available for purchase at a set date.

» Should I always pay a commission when buying mutual funds
There are three main types of mutual funds when it comes to commissions.

» Find the lowest risk investment portfolio
If you're trying to find a good investment portfolio, then you may want to look at the Treynor measure.

» The difference between PAX World Funds and The World Funds
The first type is purchased through the company PAX, and these funds focus on socially responsible companies.

» The Alpha factor explained
A new method of differentiating between different investments.

» How good is your planned investment
A company prospectus is a legal document that has been filed by the company that you might be thinking about investing in.

» How do I find the best investment advisor?
If you're looking for the best investment advisor for you, you should make sure that you pay attention to the type of investments that that advisor usually recommends.

» How to find the best full-service stockbroker - ask questions
Before you decide who you should choose for your full-service stockbroker, make sure that this is the best option for you financially.

» Investing in commodities
Investing in commodities is not too hard to do - the real problem comes in when you are trying to decide which commodities you should invest in, and when it is better to buy or sell a particular product.

» Don't wait to get your retirement payments!
If you're looking for an annuity, there are a variety of different annuities to choose from.

» Multisector bond funds explained
If you are looking to invest in bonds, but you are not sure that you want to deal with making all of the purchases on your own, bond funds might be the right option for you.

» Private annuity explained
The biggest difference between a regular annuity and a private annuity is that private annuities take place between two individuals, instead of between an individual and an insurance company.

» Avoid estate taxes with a life insurance trust
If you're looking for another way to insure yourself with a life insurance policy that will avoid any taxes after your death, then you should look into getting a life insurance trust.

» What is a Section 1035 policy exchange?
Don't lose insurance money when you change policies.

» Who should consider annually renewable term life insurances?
If you're looking for a good insurance policy, then you should probably take a good look at your financial situation, and at what you can count on being your situation in the future.

» Death benefit only plan explained
If you need life insurance, but you are not able to afford the regular price for life insurance, then you might want to look into a death benefit only plan.

» How to save money on your homeowner's insurance
In the case of homeowner's insurance, the most common way to reduce the amount of money that you will be paying each month is to increase your deductible.


Make money online

Please visit Sitetube.com and learn how to profit from your website.