The main point of today's topic "Asset Protection & Failure" is because most business owners and professionals have a sense of false sense of security until a lawsuit or judgment faces them. At this point, they realize that their foundation was improper for a long time but they did not make asset protection and lawsuit protection an important priority.
In many cases, I see entrepreneurs that have failed significantly and pay a terrible price for their failure. Precisely their failure was a misunderstanding of how important business and personal asset preservation is to a business owner or professionals' financial well-being.
What is this failure and the consequences?
This failure is bankruptcy, keeping business debt that should have been kept in the past by incorporating a new business. Simply put, the failure was failing to understand the proper corporate and legal formalities such as incorporating their business but keeping themselves as the only owner of their business. Instead a better solution is to make an s corporation owner of an Corporation or an LLC. This way in case of a business failure, you can dissolve that business and isolate those business debts to that failed business venture. Furthermore, every business owner and professional must have a protection plan that protects their house or properties from liens, lawsuits, and judgments.
When you own a business, whether you are a passive or active investor, lawsuits are inevitable. The biggest mistake is partnership or business disputes. Each partner may be personally liable for a big debt that is not dischargable in a bankruptcy proceeding.
In conclusion, you do not have to learn failure and your mistake the hard way. Make asset protection important by educating yourself on what is asset protection. Second, you should always have a protection plan against personal guarantees and an exit strategy in case your business fails.
Sean Robertson is a business and asset protection attorney in downtown Chicago assisting entrepreneurs and professionals with asset protection and business litigation surrounding personal guarantees, partnership and business disputes, and representation when a business owner has a judgment or is expecting a judgment against them. Sean can be reached at (312)-854-7102 and our website is www.RobertsonLawGroup.com.
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