Asset Protection

Asset protection is the concept of and strategies for protecting one's wealth. It is a set of techniques created to give protection to your assets from any future claims of creditors while operating within the boundaries of the law for a debtor-creditor relationship. Many individuals and business entities use these techniques to prevent certain potential creditors from going after them and to restrict the access of creditors to certain valuable assets.

Asset protection is different from defrauding the creditors. It is completely legal. Every individual, business owners, directors and executive should have their asset protected. In short, through asset protection, individuals and business entities are able to protect their property or business from risks losing all your assets from bankruptcy, lawsuits, divorce settlements and/or other claims.

There are many strategies and techniques that can be used to protect one’s assets. In deciding which strategy or technique to use, it simply depends on each individual or business circumstances (i.e. the risks and amount of assets involved).

These are some differences between individual vs different company setup.

Today we will talk about one of the techniques and strategies that is commonly used for asset protection.

Using Holding and Operating Companies to Protect Business Assets

This is an effective method of protection of assets that helps to limit liability risks in your business structure as each company are a legal entity of its own.

A business structure that is ideal will involve an operating entity that does not own much vulnerable assets and a holding company that owns the business’s assets. For example, as the operating company is subjected to more risks, a manufacturing business can have all its equipment and intellectual property owned by a holding company that is a separate legal entity from the company operating the business. This structure may substantially help business owners to limit liability for both business debts and personal debts.

As most business owners put a lifetime of hard work into accumulating wealth and assets they currently own, asset protection is necessary to prevent all the hard work to be undone by in an instance.

Disclaimer: This information is of general nature and should not be taken as a blanket rule for all circumstances. We will need to understand your financial circumstances and current business structure before we can provide you with an advice that best suits your circumstances.

If you would like to inquire about an asset protection plan or strategy for your business or find out more about your rights and options, Straits Lawyers are here to help. Simply send us an email at info@straitslawyers.com or give us a call on 8410 9069 to arrange an appointment for an online interview.

Please note that this article does not constitute legal advice and Straits Lawyers will not be legally responsible for any actions you take based on this article.