Business Lawyer in Redding, CT
Business ownership is a challenging and risky venture. You must balance the needs of the business with the needs of your family. When you own your own company, it’s essential to plan the separation of your business and personal finances carefully. If the business is organized correctly, you won’t have to lose your home, personal savings, and property if the company fails. To better ensure that your personal assets are insulated from your business liability, it’s important to work with an experienced business lawyer in Redding, Connecticut. Here are a few things that the team at Sweeney Legal, LLC will ask you to consider as we help you create a corporate structure and asset protection strategy:
Avoid Taking on Personal Liability for Business Debt
When you borrow money to fund your business, make sure that the loan is in the business name rather than in your name personally. All the legal lending paperwork should be attached to the company’s tax identification number and not your Social Security number. Some lenders may be reluctant to lend money to a new business without a personal guarantee. If that’s the case, you may have to keep searching for an institution that understands your needs or save up and pay cash for the project. Regardless of how you choose to finance the launch of your company, make sure to work closely with a business lawyer in Redding, CT to avoid making missteps that could cost you dearly down the road.
Choose the Structure of Your Business Carefully
When you start your new business, one of the first decisions you have to make is how to structure it. An experienced business lawyer in Redding, CT can help you weigh the pros and cons of each structural option:
- If you organize as a sole proprietor, your personal assets are more at risk than if you incorporate your company. Sole proprietors are personally responsible for all business debt, so if the company runs out of money, creditors may seek to take your personal property to satisfy the obligations.
- In a partnership, liability is similar to a sole proprietorship. However, responsibility is shared according to the partnership agreement.
- Incorporating a business puts up a dividing wall between your business and personal accounts so that you are less likely to lose them if the company folds. While setting up and operating a corporation is more complicated and more expensive, it may be worth it if you have considerable personal assets.
Keep in mind that business owners are personally liable for some types of debt, regardless of how the company is set up. For example, the Internal Revenue Service holds the owner of the company responsible for payroll taxes in all types of organizations. Also, every case is different, so before you make any significant decisions, consult a competent, experienced business lawyer in Redding, CT who is familiar with your state’s laws and those of your county and municipality. While no one sets out in business ownership to fail, it’s smart and responsible to plan and protect your home and other personal assets just in case.