Personal Injuries: Basic Knowledge For You

Tips To Protect Your Personal Assets As A Small Business Owner

For many small business owners, their personal finances and business finances are completely intertwined. Although this may not seem like a problem when you are first starting out, , in the long run, there can be negative repercussions for keeping your finances combined in this way. In the event that something goes wrong, you can lose everything if your personal assets aren't separated from your business. The following tips can help you avoid this problem.

Choose the Right Business Entity

All too often, new business owners legally set up their business as a sole proprietorship, often because this seems like the easiest option. Unfortunately, this leaves your personal assets open to loss through the business. For most newer small businesses, a limited liability corporation (LLC) is a better choice simply because it legally separates your personal assets from your business assets. In the event that your business is sued or goes bankrupt, personal assets like your home or retirement savings will be safe from these legal proceedings. There are several other entity options that are also available to small business owners, so it makes sense to speak with a lawyer before deciding between them.

Protect Against Liability

Lawsuits and settlements can be a normal cost of doing business, but they can also drive your business under if you aren't prepared for them. First and foremost, you need to keep in contact with a lawyer who can help you when the need arises, perhaps even keeping someone on retainer if possible. This way you have legal advice at your fingertips if a lawsuit is threatened. Second, you need appropriate insurance to help offset the costs of any lawsuits. At a bare minimum, most small business owners need worker's compensation, product liability, and property coverage for their business. Every business has differing liability concerns, so speaking with an accountant and a lawyer is necessary to ensure that you have all your bases covered.

Don't Mingle Assets

Mixing your personal life in with your business is a bad idea when it comes to money. For example, don't treat the business as a bank account -- instead, pay yourself a regular salary so that the business assets are legally transferred to your personal assets. Also, don't float business expenses from your personal account unless you have formally transferred personal assets into the business. Keeping things separate not only protects you on a personal level, but it also helps guard against any legal or tax implications later.

For more help with setting up your business or making sure you are protected, contact a small business lawyer in your area.

About Me

Personal Injuries: Basic Knowledge For You

I have worked as a legal office assistant for about 20 years. The office specializes in personal injury claims, and many clients are looking for settlements. I have great compassion for the individuals I see, and most people are looking for money to pay their bills. Unfortunately, insurance claims are difficult and clients often file the wrong paperwork. They don't see many doctors due to costs, and settlement offers are generally low. I know that lawyers can help to raise claims substantially. They know the law and they can offer advice to clients so good results are seen. I want you to learn some basic information about personal injuries, insurance settlements, and the general claims process. Your rights and needs are important, but it's difficult to secure a settlement if you know nothing about the law. Gain some knowledge today, so your personal injury decisions are the right ones.

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