Whether you’re in the beginning stages of building your business or in the thick of it – the risk of losing it is a serious reality.
And not taking the necessary steps to protect your business from various threats is something you can’t afford to do.
Here at Consolidated Planning, our philosophy focuses on protecting your business before you can grow and ultimately exit it, on your terms.
In this article, we’ll share two foundational ways you can protect your business from creditors and predators so that you can be proactive in building your business.
2 Ways to Protect Your Business
We know the growth of your business is top of mind but ensuring your business is protected IS a foundational part of its growth.
1. Set Up the Right Legal Entity
The foundation of protection for your business starts with its legal structure. And not just any legal structure but the right legal structure. While forming an LLC or electing S-corp or C-corp entity largely has to do with tax savings – it’s equally important for limiting your personal liability.
When done correctly, these entities help separate your personal assets from your business assets. That means if your business faces a lawsuit or falls into debt, your personal savings, home, and other assets are better insulated.
But simply having an entity isn’t enough. You need to ensure it is structured correctly, maintained properly, and aligned with how you operate your day-to-day. Without that, your “limited liability” could become meaningless.
While we do not provide legal advice, we will be glad to provide you with a referral attorneys that we know and trust.
2. Be Strategic With Asset Placement
Once your business is properly structured, it’s time to think about how and where your assets are held. Tools like Qualified Retirement Plans (QRPs), permanent life insurance, and annuities can provide layers of protection against lawsuits or bankruptcy, depending on your State’s laws.
For example, assets held within a properly designed retirement plan often cannot be touched by creditors.
Diversifying ways in which you protect your assets – legally and financially, allows you to:
- Reduce your exposure to personal liability
- Shield your key assets from litigation or bankruptcy
- Protect your long-term savings, like retirement accounts, from being seized
Protect Your Business From Unnecessary Risk
For business owners, confidence in your plan is everything when it comes to building your business. And the right legal structure paired with the right asset placement helps you achieve that.
To better understand the types of protection your business needs or to review what you already have in place, talk with a seasoned business planning advisor at Consolidated Planning.
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Material discussed is meant for general informational purposes only and is not to be construed as tax, legal, or investment advice. Although the information has been gathered from sources believed to be reliable, please note that individual situations can vary. Therefore, the information should be relied upon only when coordinated with individual professional advice.
This material contains the current opinions of Ashby Ware and Consolidated Planning only. These are not the opinions of Park Avenue Securities, Guardian, or its subsidiaries.
Registered Representative and Financial Advisor of Park Avenue Securities LLC (PAS). OSJ: 6115 PARK SOUTH DRIVE, SUITE 200, CHARLOTTE NC, 28210, 704-5528507. Securities products and advisory services offered through PAS, member FINRA, SIPC. Financial Representative of The Guardian Life Insurance Company of America® (Guardian), New York, NY. PAS is a wholly owned subsidiary of Guardian. WARE FINANCIAL PARTNERS is not an affiliate or subsidiary of PAS or Guardian.
Guardian, its subsidiaries, agents and employees do not provide tax, legal, or accounting advice. Consult your tax, legal, or accounting professional regarding your individual situation.
