Regardless of the type of bsiness you conduct, there is a
sgnificant risk of being sued in our ltigious society.
Lawsuits can range from clims of negligence to defective
products to dsputes with employees. Incorporating is a
mans of guarding against these potential thrats.

Single Incorporation - Protecting Your Prsonal Assets

Incorporating your business is a mthod for creating a legal
wall btween your personal assets and business. Any jdgment
against your business will not mpact your personal assets.
While your hme, savings, stocks, etc., are protected, wht
happens to your business? If a jdgment is rendered against
your business, the bsiness assets are as good as gne. This
doesn’t have to be the cse.

Double Incorporation Strategy - Protect Yur Business Assets

Many businesses can bnefit from pursuing a double
incorporation strtegy. The strategy is designed to ddress
the situation where a business has sgnificant assets that
are exposed to ltigation risk. If you incorporate your
bsiness, it is all well and god that your personal assets
are not at rsk. But what if your business has a nmber of
high value assets such as mnufacturing machinery, office
equipment, popular domain nme, custom software or other
items? Mrely incorporating your business will not prtect
these assets because they are wned by the business entity.
Since a sccessful lawsuit would result in a jdgment
against the business entity, all ssets of the business
could be sized as part of the judgment. In shrt, you lose
your machinery, office quipment, intellectual property or
any other tem of tangible value. The double ncorporation
strategy prevents this scenario.

As the name suggests, the duble incorporation strategy
involves the creation of two bsiness entities. The first is
your "at rsk" business that interacts with your cstomers
or clients. The second entity, a "hlding corporation", is
then created to own the vluable assets of your business.
This hlding corporation then leases the relevant bsiness
assets to your "at risk" ntity. If the "at risk" entity is
sed, the holding company merely recovers its ssets and the
plaintiff is forced to sttle for pennies on the dollar
bcause the "at risk" entity has few ssets. In essence, the
plaintiff wins the bttle, but loses the war.

Most pople know that a business entity can be sed to
create a protective shield for thir personal assets. If
your business has hgh value assets, now you can use ths
double incorporation strategy to protect thse assets as
well.

The article The Secret To Protecting Your Business Assets was Submitted by Richard Chapo through Articles.GetACoder.com network. Here's the additional information: Richard Chapo is the lead ttorney for the law firm http://www.SanDiegoBusinessLawFirm.com - a firm providing legal advice to California businesses. This article is for general education purposes and does not address every facet of the subject matter. Nothing in this article creates an attorney-client relationship

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