As a business owner, you must preserve your assets in order to maintain your financial stability. Unfortunately, a lot of us don’t understand the fundamentals of asset protection or don’t have a working plan in place.
This article will help highlight some of the most crucial strategies any business owner should be aware of when it comes to protecting their wealth.
Limited Liability Companies (LLCs)
LLCs offer owners legal protection from being held personally accountable for any debts or claims resulting from the business’s operations and activities. They are also advantageous since you are able to keep your personal assets distinct from those needed to run your business. This prevents the failure of one from dragging down the success of the other, which happens more often than most people think, and can bring both into bankruptcy court. An expert lawyer can assist you in creating an LLC and offer guidance as necessary on the best ways to organize your business structure.
Contracts
Make sure all agreements are properly outlined in contracts when working with contractors, vendors, suppliers, consumers, and other parties who frequently interact with your business. Verbal promises won’t hold up in court! You may safeguard yourself and your business if the other party doesn’t uphold their half of the bargain by making sure everything is set down in writing using a legally binding document.
Insurance
A business must have insurance coverage in order to protect its assets as well as to provide a source of income in the event of unforeseen events, such as being sued or having to pay legal fees due to an accident on the premises. To ensure you are adequately covered, talk over any potential risks with an insurance broker and put the appropriate policies in place.
Employee Benefits
Employee benefits can be very beneficial when it comes to safeguarding your company’s assets, despite the fact they are sometimes disregarded. They can protect you from any litigation resulting from wrongful dismissal or poor working circumstances, in addition to helping to recruit skilled and devoted workers (which in turn lowers turnover costs).
Retirement Plans
With so many options available, it’s important to do your research and choose the right retirement plan for the owners and even employees of the business. With this, you can protect yourself both personally and professionally by ensuring you’re able to save for the future while reducing your taxable income. Benefit plans can also help differentiate your business when it comes to hiring.
Trusts
Setting up a trust can be an effective way to protect your assets from creditors and lawsuits while also providing a wealth of tax advantages. A trust can help to distribute assets efficiently when the time comes. Trusts can be good options for business owners who have more than one successor.
Talk to a Financial Advisor
Finally, it’s important to keep in mind asset protection strategies are based on your individual specific situation. Before making any decisions, consider talking to a financial advisor who can examine your situation and provide tailored advice about the best steps for keeping your assets safe.
Implementing these strategies may help keep your business secure so you can focus on what matters most – growing your company and reaching success.
If you’re unsure which path is right for you, be sure to talk to our financial advisors for advice tailored to your specific situation. At Independent Financial Services, we have professionals who can guide investment strategies, offer tax-efficient investment options, and assist in retirement and succession planning.
Contact us today to learn more about how we can help you ensure your business’s longevity and success!
Opinions expressed in the attached article are those of the author and are not necessarily those of Raymond James. All opinions are as of this date and are subject to change without notice.
Prior to making an investment decision, please consult with your financial advisor about your individual situation. You should discuss any tax or legal matters with the appropriate professional.