LLC Asset Protection Boca Raton, FLThere is no better feeling than being owning your own company and being your own boss. One of the most critical decisions a Florida business owner has when they start up their company is what type of business structure they should have. It is also an important part of protecting any personal assets you have and keeping them safe from any business liabilities. LLC asset protection in Boca Raton, FL is often one of the best solutions.
An LLC (limited liability company) protects the company owner from those business liabilities, such as getting sued by a disgruntled customer or employee or having to file bankruptcy. In any of these situations, the owner’s personal assets – as well as any other business that are separate entities they may own – cannot be attached in any way for the liabilities of the LLC. Only the assets and property in the LLC that is being sued or filing for bankruptcy are at risk.
While a Boca Raton, FL LLC does provide asset protection, there are some steps that a business owner may consider taking that can provide even more protection. This is because although the rule of thumb is your personal assets are protected against LLC liabilities, there may be some exceptions that could override that protection. For example, if the business owner personally guarantees any of the company’s debts and then defaults, their personal assets may then be at great risk. Some of the more common options for protection include the following:
- LLC insurance: If a party files a lawsuit against the LLC that accuses the company of wrongdoing, the LLC structure does not protect the owner’s assets if the party wins their lawsuit. Having a strong LLC liability insurance policy in place will protect personal assets in these situations.
- Build LLC’s credit: One of the most common issues that negate LLC protection is when the owner uses personal assets to guarantee a business loan. For example, a business owner just starting out may put up their family home as collateral for a business loan. But if the owner defaults on the loan, the lender can go after the home. It is not protected While this may be unavoidable in the beginning, building up credit in the company’s name as quickly as possible is essential.
- Keep a limited amount of funds in LLC accounts: If another party is successful in their lawsuit against the LLC, any funds the company has can be attached to satisfy that judgment. This is why it is important to keep the minimum amount of funds in the company’s financial accounts as possible.
To learn more about LLC asset protection in Boca Raton, FL, and how you can protect your financial security, contact MW Patton, Asset Protection Attorney today.