Are you protected? Are your assets segregated? Are you saving on taxes?
All of these questions can be answered “Yes” when you use the right mix of protective entities – corporations and LLCs.
As you probably know – doing business in your own name as a sole proprietor (or worse yet, as a general partnership) offers no asset protection. One claim and everything you own – not only your business assets but your personal assets as well – are exposed.
Using corporations and LLCs can protect your personal assets from creditor claims. And provide you with peace of mind.
The right use of entities can also save you on taxes, particularly on payroll taxes. Work with a good CPA and you will see the savings immediately. And remember, sole proprietors are audited at a five times greater rate than corporations and LLCs.
You can also use more than one entity for even greater protection. If your business is a corporation you may want to set up a separate LLC to hold your equipment. By segregating assets greater asset protection is gained.
For example, if your business corporation gets sued a judgment creditor could reach inside the business. But what if the valuable assets – the equipment, the trademarks and the machinery – were in separate LLCs and leased back to the corporation?
The answer is that those assets are not owned by the corporation. They are beyond the creditor’s reach.
While they don’t teach it in school, one of the best business lessons you can learn is using the correct mix of entities to protect you, your family and your assets.
About the author:
Garrett Sutton is an attorney, Rich Dad’s Advisor and the author of
Own Your Own Corporation, How to Buy and Sell A Business, The ABCs of Writing Winning Business Plans and the co-author of
Real Estate Advantages. Garrett helps real estate investors, entrepreneurs and business owners protect their assets and maximize the benefits of corporate entities. As a Rich Dad Advisor he “de-mystifies” the law and explains how the rich use corporate assets and minimize taxes.
Garrett is a founder and partner with Sutton Law Center, P.C., a law firm with offices in Nevada, Wyoming and California. The firm still accepts new clients.
Garrett is a graduate of the University of California at Berkley (B.S. Business Administration) and received his law degree from Hastings College of Law, University of California, San Francisco. Garrett is licensed to practice in Nevada and California and advises clients from around the world on the benefits of corporate entities.
To learn more or to contact Garrett directly, visit http://sutlaw.com/