Being a business owner often requires you to wear several different hats, because you have so many different responsibilities! From creating and championing your venture’s vision, to keeping everyone on track with the right strategy, to overseeing sales and marketing, to dealing with customer satisfaction, there are many key components to being a successful entrepreneur that you need to stay on top of. One of the most important things that you have to do, however, is something that safeguards all of these aspects of your business: implement asset protection.
Asset protection is a legal strategy that can protect a Georgia business from risks, liabilities, and creditor claims. It can prevent all that you’ve worked so hard for from falling apart, and preserve both your personal and your business’s financial stability! You have dedicated significant effort to earn your money and acquire valuable possessions. Building your wealth and your company has been a gradual process, but their security can be compromised in an instant. Don’t let that happen.
Below are 3 asset protection tools you need if you own a business in Georgia:
- Limited Liability Company (LLC)
A limited liability company is a business structure that separates a company’s assets from the owner’s personal assets. It’s a great asset protection tool as it shields business owners from being affected by business debts or liabilities. Forming an LLC guards things like your home, personal bank accounts, and vehicles from potential creditor claims, bankruptcy, lawsuits and other business-related liabilities. In addition, a Georgia LLC also simplifies filing, management, compliance, regulation and administration.
LLCs typically have operating agreements that outline the rights and responsibilities of a business owner. The operating agreement is additional insurance that there will be no personal liability attached to a business owner and is a binding contract once all parties involved have signed. This also protects your business in the eyes of the state, as state’s “default rules” govern businesses that lack an LLC. In fact Georgia law states that any member of an LLC is an agent who can act as such on behalf of the LLC. This mean that without an operating agreement in place, any member can act as a manager or make decisions for the company, which can cause a ton of problems. Therefore an operating agreement is a necessary aspect of an LLC in order for you to successfully defend assets.
- Business Insurance
This is another crucial aspect of protection that can act as a safety net and prevent creditors from seizing your personal assets. It’s important to analyze your unique business needs when selecting your insurance coverage so that you can ensure any potential risk, threat or liability can be accurately covered to avoid having any personal or business assets taken. A few of the necessary insurances a business should carry include general liability insurance, property insurance, professional liability insurance, employment practices liability insurance and more.
- General liability insurance covers you and your business from personal injury claims and property damage resulting from your products, services or operations.
- Property insurance covers damage to your own property. This protects your assets as you’ll be awarded compensation for damages caused by others so the funds aren’t coming out of you or your business’ pockets.
- Professional liability insurance acts similarly to property insurance and shields business owners from claims for negligence, failure to deliver a service on time, breach of contract, general misconduct, and more. It acts as a shield for assets against possible lawsuits.
- Employment practices liability insurance, also known as EPLI, protects against claims of discrimination based on sex, race, age or disability, wrongful termination and harassment.
- An Irrevocable or Revocable Trust
A third available asset protection tool is a trust. A trust is a legal and financial arrangement between a grantor, (owner of a trust) the trustee, (the one who will manage the trust) and the beneficiary (the one who’ll inherit the trust). An irrevocable trust cannot be modified, and a revocable trust can be modified at any point in time, as long as the grantor is competent.
A trust holds onto your assets and can provide a layer of security for business owners, especially those in high-risk industries, like construction, or healthcare. It can also prevent the possibility of a lawsuit or can sometimes influence a favorable settlement if a lawsuit were to arise. When a business owner transfers their possessions into a trust, it can appear as though they have limited access to assets; therefore a claimant in a lawsuit is likely to settle for less, if they’re able to sue for anything at all.
Shelter What’s Yours!
Utilizing these 3 significant asset protection tools can safeguard the business you worked incredibly hard to build. An LLC separates your personal and business assets by shielding your personal wealth from high risk and possible business liabilities, business insurance by offering coverage for your property, lawsuits and liability claims, and irrevocable and revocable trusts by further protecting your assets by keeping them out of reach from creditors. You work hard for your money and personal wealth. Don’t leave both in jeopardy by lacking these tools. Setting them up can be a challenge, so it’s important that you work with a knowledgeable asset protection attorney who can help you take advantage of each one.
How Fouts Law Group Can Help
If you’ve not taken the measures to properly protect your business, it’s time to do before it’s too late. An experienced asset protection attorney can evaluate your unique situation and implement a comprehensive strategy that will protect the things that matter most to you. At Fouts Law Group, our lead asset protection attorney, Jeff Fouts, has nearly 30 years of experience helping clients secure their assets and shield their businesses from threats of bankruptcy, lawsuits, and more. He can help you determine the correct business entity for maximum protection, and create a revocable or irrevocable trust that holds your assets for you. Let us minimize your risk! Call Fouts Law Group today to schedule a free consultation and learn more about protecting your Georgia business.