These four strategies will help you to protect your business capital and ensure that your business can continue operating, generating profits and employing a dedicated team of workers.
If you have functioned as the sole proprietor of your business, you should incorporate before making any major investment. Incorporation separates you from your business. Under the law, there are different types of corporations, such as a limited liability corporation.
As you grow your business, consider separating it into a holding entity and an operating entity. The holding entity owns all of the assets, investments and capital. The holding company then leases the assets and capital to the operating entity.
When your business is considering making an investment, such as the purchase of land or a building, it is a good idea to speak with a lawyer.
If you are the owner or CEO of a large company with considerable investments, consider setting up a blind trust.
These four steps will help to protect your business and its assets and investments. Because of the complexity of these actions, it is best to work with a lawyer.
Incorporate
If you have functioned as the sole proprietor of your business, you should incorporate before making any major investment. Incorporation separates you from your business. Under the law, there are different types of corporations, such as a limited liability corporation.
An LLC protects your personal assets from a lawsuit filed against your business. The other types of incorporation procedures are S incorporation and C incorporation, which are geared toward companies with employees and two or more co-owners or partners.
Establish a Holding Entity
As you grow your business, consider separating it into a holding entity and an operating entity. The holding entity owns all of the assets, investments and capital. The holding company then leases the assets and capital to the operating entity.
The operating entity conducts the day to day business operations. This type of a business structure is ideal for corporations that could be faced with costly or frequent lawsuits, such as restaurants or grocery stores.
Get Professional Advice
When your business is considering making an investment, such as the purchase of land or a building, it is a good idea to speak with a lawyer.
A business lawyer can advise you on the tax implications, environmental regulations and other issues related to big business investments. A professional, like those at Carter West, know that these sort of things can be hard to navigate, especially if you’re new to it all.
The legal advice that you receive will allow you to make an informed decision about where to invest your corporation's profits.
Set Up a Blind Trust
If you are the owner or CEO of a large company with considerable investments, consider setting up a blind trust.
The blind trust would be operated by an independent entity. All investments would be controlled by that entity, and the profits would be put into a trust controlled by the entity. You and your beneficiaries would be able to receive remuneration through the trust.
These four steps will help to protect your business and its assets and investments. Because of the complexity of these actions, it is best to work with a lawyer.
An experienced lawyer will make it easy for you to understand these legal issues and solutions.
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