There are a lot of people who dream of someday starting their own business. They either have a great idea they know they can capitalize on; or they have a natural talent that can be monetized. Regardless of your reasons, becoming your own boss is something to be celebrated; the epitome of the American dream.
But what’s also part and parcel of the American way of life is an over litigious society. Whether as a result of an honest misunderstanding, neglectful conduct, or people looking for an opportunity to make a quick buck, business lawsuits are an every day occurrence. Keeping these factors in mind, it’s essential to come up with a plan to protect your personal assets.
This is not the time to cut costs or corners. A wrong move could leave you vulnerable. Granted, your home in Florida may have homestead protections; but you could still end up losing assets and resources over a lawsuit.
Establishing a Limited Liability Company, a Limited Partnership, or corporation means your business is a separate entity from yourself. As a result, in the event of a lawsuit, you will not be personally liable for your business’ debts. On the other hand, if you’re a sole proprietor, creditors can go after you personally.
Not only will this make things easier come tax time, but by not commingling business funds with personal funds, you’ll prevent muddling the line between business and personal assets.
If someone falls on your premises, or a disgruntled employee sues you for a labor law and employment issue, or another business claims you’ve breached a contract, it can result in great financial loss. Even if you were to prevail in a lawsuit, attorney’s fees add up fast. By having insurance coverage, you transfer the financial burden to the insurance company. There is one caveat, however: insurance policies are complex and highly nuanced. Don’t assume that just because you have business insurance, you’ve got your bases covered. Carefully study that policy and make a list of questions: Would it cover professional liability (errors and omissions or E&O)? Worker’s compensation? Accidents on premises? Product liability? Every business is different, and it behooves you to get a customized policy that really covers your specific needs.
Protecting your assets is a serious issue that requires more than a cursory online search. Hunter Business Law can help you determine which options best protect both your business and your personal assets. You’ve put a lot of time, money, and effort into becoming an entrepreneur. Don’t let a misstep place it all in jeopardy. Contact us and get some peace of mind.
This Blog was written by Hunter Business Law Founder, Attorney Sheryl Hunter. View her profile HERE.
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