The structure you choose for your business, can provide a layer between your business and your personal assets.
Asset protection is a real issue which needs to be considered by business owners. A business may be at risk, not only of being sued by customers, employees or suppliers, but also of being prosecuted by regulatory bodies. As a result, the structure you use for your business is important, as it needs to provide the greatest level of protection for you and your family.
Generally the best asset protection is provided by a company or trust structure.
A Company is a separate legal entity that provides limited liability for shareholders, meaning that the extent to which the assets of the shareholder are at risk is limited to the assets held in the company. This results in personal assets of the business owner/s being less exposed in the event that the business is sued or prosecuted.
Alternatively, a Trust structure to hold a business also works as an asset protection strategy. Similar to a Company, a Trust structure will provides asset protection as there is a separation of the business assets from the individual. As the word "trust" suggests, the business is owned on behalf (or on Trust) for another group called the beneficiaries. The Trust is owned by the Trustee, which can either be individuals or a company.
To discuss the best possible structure for you, contact our office on 03 5973 6888.