Insulating Business Risk with LLC

The major criteria in selecting the entity within which to conduct a business is the degree of insulation offered from the liabilities of the business. If you already own a business or are planning to start one, do you want to place everything you own at the risk of the business?

Any business venture is a Dangerous Asset. There are leases to sign, bank loans, customers, employees, competitors, and government agencies-all with the potential to blow you sky high. You don't want the liabilities from this business to threaten your other assets. The proper strategy is to contain the liabilities within the shield of the LLC. If something happens inside the company, make sure that it doesn't contaminate your savings and other assets.

The purpose of asset protection planning is to allow you to engage in a business activity while protecting your other assets from the risks associated with the business. The proper plan enables you to pursue attractive investments and business opportunities without jeopardizing everything you own. Do you want to buy real estate or start a business? Understand your level of risk and then protect what you have. That's the sensible approach.