There are numerous ways that small business owners can protect their assets from being appropriated to cover legal harm.

#1: Do your research and be familiar with the possibilities.
It is essential to understand what may occur if your business faces a lawsuit, including whether or not personal assets could be lost. Since your business and yourself as an individual could be personally sued, both business and personal assets should be protected right away.

#2: Be proactive.
Asset protection measures can be instated at any time before a lawsuit occurs. Any type of business should be preemptively protected, prior to trouble taking place.

#3: Track and insure everything.
Every liability and asset needs to be documented correctly. This includes taking inventory, tracking business, savings, and retirement accounts, and monitoring personal property and stocks. This step also helps to confirm that you can cover the business with sufficient insurance. Business policies, a general policy, and premises liability insurance are a few types that can cover your business and keep it operating even if a mishap occurs.

#4: Set up a proper structure.
Building your business properly from the ground up can set you up for more success legally and in regards to tax purposes. An attorney and CPA can offer you the best advice to find out how to best structure the business.

#5: Implement holding and operating companies.
In cases where business owners hold ownership for a building (holding entity) as well as a business that operates within the building (operating entity), they should aim to keep the entities completely disassociated with one another. If either business is faced with a lawsuit, the detached structure could ensure both are not lost.

#6: Become familiar with local laws.
The particulars of asset protection can differ greatly from one state to the next. Certain states offer integrated personal asset protection, but others don’t. It is important to find out if your property is at all exempt from being seized, or if all could be lost. Either way, an attorney can help navigate asset protection for at-risk professionals for those who need assistance understanding the laws.

#7: Read the fine print.
Limited contracts that limit damage or that exclude particular lawsuits should be signed when feasible. Additionally, be sure to always sign these agreements as the business.

#8: Take a multi-faceted approach.
Asset protection does not have just one solution that is appropriate for everyone and every business. As there are many options to solidify a strong asset protection plan, select a strategy that has a variety of factors. A combination of approaches will likely be the best way to protect your company.

In short, the best course of action to take for your peace of mind and for your business is to begin right away. Every business must protect itself and its assets so as not to be an easy target for individuals who may be seeking to file a lawsuit on every whim.