Business assets, such as real estate or intellectual property, are vulnerable if they are owned by the same legal entity that operates the core business because a judgment against that business entity will threaten the same assets and thereby jeopardize business operations.
Business asset protection starts by separating the ownership of essential business assets from core business operations which are susceptible to lawsuits.
Many small businesses own commercial real estate which the business uses as offices or warehouses. A recorded judgment against the business will immediately and automatically become a lien on the business's real estate. A business can set up an entity, such as an LLC or partnership, to take legal title to business real estate at the time of purchase. Such entity can be owned by the same individuals who own the operating business and the operating business will lease the building from the entity.
Small business owners often underestimate the value of their intellectual property including trademarks, copyrights, and patents. A business's intellectual property may have little value to a third party or creditor, but the same intellectual property is essential to the debtor's business. The debtor's business could be forced to shut down if a judgment creditor levied upon essential patents, trademarks, or other intangible property.
We help people go through their assets and income and determine what is at risk of collection from a judgment creditor. We then develop a plan to protect any exposed assets from collection.
If you're interested in protecting your assets from potential creditors, contact us or schedule a consultation!