Having a limited liability company (LLC)1 can be extremely beneficial for business owners in many ways. One such benefit is that owners have the ability to use their LLC to protect their assets. Unlike a sole proprietorship or a partnership, an LLC is a completely separate legal entity from its owners. For this reason, creditors can generally only go after any assets that have been invested into the business. Asset protection by an LLC is not always absolute, however, as there are certain instances when your assets may still be at risk. The following are some actions you can take to ensure your assets are best protected by your LLC.
- Keep the LLC completely separate – Though an LLC is supposed to be separate, too many owners co-mingle funds with personal accounts or use business funds for personal expenses. This can open the door to a creditor seizing your personal assets.
- Make sure you have adequate insurance – Though you never expect to get into trouble, make mistakes, or get into a legal dispute, it can happen when you least expect it. If your actions result in a legal claim and you do not have the insurance to cover the judgment, your personal money may be at risk to pay off the judgment. An attorney can advise you of proper levels of insurance for your type of business
- Possibly form a trust – Trusts2 are a legal tool that can protect your personal assets from seizure for issues that arise from your LLC.
Call an experienced business lawyer at the Weisblatt Law Firm, LLC today
Making decisions regarding your LLC or another type of business can be stressful and confusing. It is always a good idea to have an attorney on your side who can provide sound legal advice no matter what type of legal issue your business is facing. Experienced Houston attorney Andrew Weisblattt can advise you on a wide variety of legal issues, from asset protection to contracts to business transactions. If you have any questions or are facing a legal dispute, do not hesitate to call the office at 713-666-1981 today.