To protect personal assets, it’s important that business owners operate and structure deliberately, and in a way to remove asset ownership from āat riskā individuals.
Why? Because everyone in business is carrying a level of risk as things can, and often do go wrong.
There are a number of options that can be taken to protect personal assets and ensure that they are not exposed to liabilities that put a financial strain on the business which directors are personally liable for, or worst-case scenario, business failure.
There are steps you can take to isolate and limit these risks ā this is called asset protection.
How do business owners protect their personal assets?
It all starts with structure ā the way in which you structure your affairs and business operation is key to asset protection.
Companies and trusts provide protection to individuals and also allow you to nominate an individual who will be implicated in the business structure but removed from personal asset ownership. This protects the asset from the business operation.
There are many different structures that could be considered. Refer to the table below summarising the key attributes of three common business structures and an explanation of trusts, companies, asset holding and trading structures.
12 golden rules of asset protection
In addition to structure there are other rules we follow when advising on structure and operation of optimal asset protection. We call these our 12 golden rules of asset protection.
How can Walsh Accountants help?
Starting a business? Our Business and Entrepreneurial Support Division can help you ascertain the perfect structure to operate your business and protect your assets.
If you are concerned about your personal asset protection, our team can help you. We can conduct a structure and asset review to ensure that all your business interests and personal assets are kept at arm’s length from each other. Should you experience financial hardship in your business which the director is personally liable for, the personal assets will be protected form any recovery action.
Contact us for a complimentary discussion based on your personal circumstances.
