Starting a new business is always an exciting landmark. The planning process is a good time to address a few key areas that can impact a successful business down the road. Careful consideration and well-informed decisions of these options can ensure that an investment is protected. With proper planning, a strong foundation can protect the business over many generations. The following are a couple of key points to consider.
Who Will Own the Business?
Asset-Protected Trust. There are several benefits from putting a business interest into an asset-protected trust. An asset-protected trust can protect business interests from creditor claims. It does not influence how a business is managed. It allows the business to operate as it normally would. The trust can also provide asset protection to future generations named as beneficiaries of the trust.
Separate Business Entities. Another method to help protect assets from creditors is to create separate business entities, each owning certain real estate or capital on behalf of a business venture.Where Will The Business Be Located?
Thanks to advanced technology and the internet, it is now very easy to form a business in another state. Many states offer incentives for new businesses. You may find that labor, utility, taxes and operating costs are more favorable outside of your home state.
We counsel clients to consider a broad range of decision points prior to starting a business. With minimal effort, proper advance planning can help protect a business and its owners for generations.