Protecting your company against lawsuits and legal actions related to your products or operations is critical to the long-term success of your business. Maintaining adequate and up-to-date liability insurance is a key element of your overall business plan. Working with a firm that specializes in Sugar Land real estate law can help you determine the right approach to setting up your business and ensuring that you are protected against legal repercussions throughout your operations.
Choosing the Right Configuration
Consulting with a qualified Sugar Land small business attorney can provide you with added information when performing the initial setup of your company:
- S corporations are designed to provide legal separation between the assets and debts of the business and the assets and debts of the individuals who own shares in the company. This can ensure that personal finances and real estate holdings are exempted from any settlements affecting the business.
- C corporations are the most common form of company configuration in the U.S. Like S corporations, investors and shareholders are liable only for the amount they have in the company and not for any other assets they hold independently of their corporate investment.
- Limited liability corporations are designed to provide owners with tax benefits while protecting their personal assets from lawsuits related to their business operations.
- Sole proprietorships offer the most extensive tax benefits for owners. They offer little or no protection for personal assets if the company is sued, however.
Making sure that you are protected against lawsuits brought against your company is an essential element in managing your business affairs.
Avoiding Serious Missteps
Even if you set up your corporation correctly, mistakes in how you handle your financial matters can sometimes put your personal assets at risk. Some of the most common errors made by business owners include the following:
- Using your personal funds to pay salaries or purchase items for your business can blur the line between your business assets and your own assets, leaving you liable for actions taken against your business.
- Failing to comply with all regulations governing corporations in your state, including failure to form a board of directors for your company, can eliminate the protections afforded by corporation status.
- Defaulting on personal guarantees made to acquire loans can allow lenders to come after your personal assets as well as those of your company.
Enlisting the help of a qualified Katy estate planning and business law firm can help you to avoid these mistakes and can protect your personal assets against loss if your business is the target of a lawsuit.
The legal experts at The Law Office of Henry Jakob specialize in real estate law and civil litigation matters. Their expertise in the business law field can help you make the right decisions when forming your company and ensuring that your personal assets are protected. Call us today at 832.879.2244 to discuss your case with one of our experienced legal professionals. We look forward to the opportunity to serve you and your company.