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How to Protect Your Business Assets

To grow a healthy business, it’s important to keep company assets secure. These assets include checking accounts, vehicles, and even real estate safe from criminals and natural disasters. Many business owners also want to reduce their tax liability as much as possible to earn more profit every year.

To maximize revenue and keep your assets safe, there are many effective strategies you can follow. In this guide, we’ll explain several ways you can protect your business assets in a legal and ethical manner.

6 Business Asset Protection Tactics for Business Owners

Discover the practical steps you can take to secure your business assets and begin operating your business successfully.

1. Buy Business Insurance

If you own vehicles, physical goods, inventory, and real estate, you should make sure they’re all covered by business insurance. Business insurance is a commercial policy that protects your assets from harm.

For many, it’s one of the fundamental costs of doing business. In the event that your assets are damaged or destroyed, your insurance provider will typically cover the costs. With business insurance, you don’t have to worry about recouping possible asset losses on your own. Taking out an insurance policy on your property is key to minimizing the financial burden of natural disasters and theft.

2. Consider Setting Up a Trust

A trust is a legal document that specifies control over one’s assets. The grantor, or the person creating the trust, gives control over their assets to the trustee. The trustee is the person or entity managing the trust.

There are many kinds of trusts to choose from. For example, you can set up an irrevocable trust to keep your assets free from expensive taxes, creditors, and bankruptcy. However, if you decide to start a trust, it’s best to consult an attorney. You may have questions, such as how safe is an offshore trust? Hiring an attorney can demystify the trust creation process so you can make an informed decision.

3. Keep Your Assets Separate

It’s a common mistake for business owners to combine their business and personal accounts. This is especially true for sole proprietors who may use their own cash to fund their business operations.

However, if you are facing a lawsuit, your personal assets could be seized if you lose. This can eventually turn into a financial disaster if you don’t fix this problem. For this reason, you should create separate business and personal bank accounts. This way, if you are facing a lawsuit, only your business assets can be targeted by the plaintiff.

4. Hire a Lawyer

If you can afford to, you should hire a lawyer to protect your business interests. For example, many businesses have intellectual property (IP) to protect. This includes logos, trademarks, and slogans.

Without protection, these properties can be stolen, manipulated, or used by other entities. By hiring a business lawyer, you can keep your IPs safe and secure, with the help of the U.S. Copyright Office.

5. Form Your Business Entity

If you run a sole proprietorship or unincorporated business, there’s no legal or tax distinction between your personal and business assets. Creating a corporation turns your business into a distinct legal entity.

Various corporate structures exist to safeguard your assets, each with unique tax and legal consequences. These include Limited Liability Companies (LLCs), C corporations, and S corporations.

As the owner of an incorporated business, you are deemed an officer of the corporation for tax and legal matters. In this role, you are not personally liable for corporate debts, contract breaches, or injuries caused by the corporation or its employees. The corporation can be held accountable, but creditors can only go after corporate assets, not the personal assets of the business owner or director.

6. Secure Trademarks/Patents/Copyrights, etc.

Intellectual property might not apply to every business, but if you’re selling a product you created or information like a seminar, book, or online course, you’ll want to ensure it’s copyrighted or patented. Trademarking is more about marketing elements like taglines, slogans, or corporate logos. These protections only cost a few hundred dollars and can be easily managed by a legal expert, such as a patent attorney.

Protecting your business’s intellectual property, both its core assets and marketing, is crucial because business-related piracy is widespread. For instance, many vendors on Amazon sell items that violate international business and intellectual property laws. Domestically, this can also be a problem if a competitor or opportunist takes your work and profits from it. Without the right trademarks, patents, and copyrights, you won’t have much legal leverage to stop these competitors and reclaim your rightful ownership of the product or idea you created.

End Note

Ultimately, there are many legal ways to keep your assets safe. Without these protections, your assets could be targeted by the government, criminals, and unscrupulous individuals. If you want to maximize protections for your business assets, your best option is to hire a business lawyer to guide you on the right path to success.

Saeed Baig
Saeed is a traveler who loves to explore the world and experience thrilling adventures. In short, he is living the life to fullest.

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