When it comes to structuring your business, the route you take could have long-term ramifications on your financial well-being. While not every entrepreneur expects to be sued in their business venture, many choose the limited liability company (LLC) formation for the chance at distancing their personal assets from business-related liability.
Tips for taking your LLC venture seriously
While an LLC can protect you from some forms of litigation, it is not a cure-all – especially when it comes to negligence and fraud. There are times when plaintiffs seek damages via personal assets of business owners by claiming fraudulent or negligent behavior.
It is possible to protect your assets from these types of claims by developing the right contracts and agreements, hiring licensed professionals and all-in-all performing due diligence as a business owner. You may also want to ensure you purchase the correct business insurance for your company.
Additional moves to make to protect your assets
Do you have a spouse? Placing your assets in their name may help protect them from litigation – especially if your business venture or occupation comes with risk. Pre- or postnuptial agreements can help you to set up these assets as your spouse’s separate property and therefore unable to be sought in the litigation.
What’s more, you may even place certain assets into an LLC that is separate from your primary business LLC. However, these matters can get quite complicated and you should not be too drastic in your decisionmaking. Be sure you speak with a professional who has an extensive background in business litigation and formation.