Your assets aren’t only a number in a bank account. They represent years of planning and hard work to bring your dreams to fruition.
Business is a gamble, chock full of calculated risks. Every aspect of your business has to merge to form a corporate veil around you.
Any pitfall or invisible landmine could put you in jeopardy. Be vigilant and protect your assets through methods that withstand the test of time. Check out these eight asset protection tips.
Knowing your asset type is the best way to identify possible claims and how you can protect your assets from them. Summarily, your assets fall under tangible and intangible categories.
Types of assets include cash and their equivalents, patents, inventory, and investments. Broader forms of assets include items of value like vehicles and furniture.
Business assets are any tangible or intangible assets owned by the company. The company itemizes and values them on the company balance sheet.
From there, you can trace their value and contribution to the business. A property, for example, holds your venue, but it may also be liable in case of injury on the property. The same goes for equipment and its use.
Familiarize yourself with the assets you want to protect to grasp better the type of protection and contracts you need to cover your bases.
Protect from the Inside
Employees are the core of any business. All of your downstream employees work to build your empire. As the main hands on deck, they are as responsible for your success as you are. Unfortunately, however, they can also be the downfall of it.
Employee-employer trust is valuable, but it doesn’t hurt to have some safety checks in place. Most companies have a nondisclosure agreement. This binds their employees from disseminating sensitive information, usually for a set period.
Assets aren’t only in the form of dollar bills. Information is one of the most critical assets of your company.
Keep what’s in the company within the company by starting protection from the inside. Protect your formulas, restricted records, and intellectual property from going public. Explore nondisclosure agreements and confidentiality contracts.
Do you remember the saying, “Don’t keep all your eggs in one basket?” It still rings true. Consult with your legal team where you can distribute your assets, so they don’t aggregate into a singular vulnerable target.
Did you know that it’s an option to place come assets under your spouse’s name? Doing so protects your assets because they may not come for your spouse when creditors go for you.
Consult with your legal team about where you can distribute your assets. The less exposed and tied to you your assets are, the safer they will be should you come into hot water.
Employ asset protection strategies like corporations, partnerships, and trusts. These are arrangements developed throughout the years to protect business assets.
A general partnership is a written or oral agreement of two or more people executing a business venture together. This business strategy requires an immense amount of trust. Each partner is still held liable for all the debts of the partnership.
While considered partners, each partner still has the ability to act on their own. This allows them to make decisions without the knowledge or consent of the other.
Corporations have a group of officers presiding and claiming ownership of the business. The group, also known as the board of directors, allows the corporation to exist as a separate entity. A corporation is under the ownership of its shareholders.
Consider setting up shop with Limited Liability Company (LLC). These are simpler to establish than corporations while providing more or less the same corporate liability.
In this strategy, the owner’s assets are immune from legal claims against the business.
Work Clean and Read the Fine Print
Piercing the corporate veil often stems from an unassuming clause in the contract. Negligence and fraud are common pitfalls. Establish agreements and clear up all gray areas before moving forward.
Never work under the table. Working under may cost you less in the short term but provides a tear in your corporate veil you may regret later. These are sticky situations where contracts carry less weight should you reference them.
Contact licensed professionals to aid you in tax planning and resolution, contractors, and repairs. Work clean and thoroughly to give your business assets a solid security foundation.
Keep your protective fortresses safe from technicalities looking to crumble your empire. Read and discuss your contracts and their subsequent execution with a legal team.
Keeping Up With Appearances
You are a living being with a personal life. It gets difficult to distance yourself from your business, especially if it’s something close to your heart. However, maintaining a corporate veil is necessary.
There are times when you have to act as an entity and representative. Use the name of the company whenever applicable.
Have a separate checkbook and bank account for your business. Corporate records and relevant documents should be under the company name. Place property and equipment titles under the company name when negotiating lease agreements.
It’s easy for the corporate aspect to leach into your individual life. Make a distinction between the man and the boss for your safety and peace of mind. This garners an additional safety net and prevents you from taking the fall alone.
Purchase Specific Insurance
Invest in specific assets with insurance appropriate for their type. Check the premises of your insurance policy to see if they cover cash, inventory, and other valuables. To learn more about getting insurance for specific items, check out this handy guide.
Get Umbrella Insurance
Insurance for pinpoint aspects of your business provides them with reliable protection. Cast overhead protection on your company with umbrella insurance.
Umbrella insurance is like a maintenance fee you pay off for the mundane obstacles and losses you may encounter as a business entity. It doesn’t mean that you can throw caution to the wind, but it’s comforting to have around.
Protect Your Assets
To protect your assets, you involve every aspect of your business. Like a castle, you need overhead protection and specific protection. Guard yourself against all sides, from distribution, details, and down to the last worker.
Thank you for reading our article! Contact us today to avail tax planning, CFO services, and more. Make wise financial decisions and safeguard the money you worked hard for.