Well, how many times have you heard an advisor preach about asset protection? There in lies the answer.
Why in the world do the experts tell you to incorporate and create all kinds of plans to insulate yourself from the business of your business? In today’s litigious society, is it any wonder that the statistics are as alarming as they are?
Everyone has heard of the lawsuit against McDonalds for serving hot coffee. Just last year in Washington D.C., a judge sues a dry cleaner establishment for $54 million for misplacing a pair of pants. So you don’t think a worker’s compensation or slip and fall legal dispute can ruin your business?
What if you were personally liable for all of the credit and debt of the business? Do you think that might have a big or small impact on your personal credit report? So, by continuing to attach yourself personally to the finances of your business is a catastrophe waiting to happen. The question is how long will it be before that time bomb erupts?
To help protect yourself, start taking real precautions to keep your business from ruining your personal credit and so much more. Here’s how. Build a separate business profile to apply for and obtain credit in the business’s name.
The first step is to make sure your entity is structured correctly. From an asset protection strategy, a C-corporation or Limited Liability Corporation (L.L.C.) makes the most sense. This also holds true when it comes to applying for business credit.