With the recent economic turmoil of the last few years, more and more businesses of all sizes have faced tough choices when it comes to the future operations of their company. Some have gone out of business and others have cut costs down to the bone to survive. Typically, the large corporations have their assets and business structure planned properly to provide as much protection as possible. However, many small to mid-sized businesses may have not worried too much about planning for the future, they are just worried about making payroll for the month.
Obviously a best practice would be to get everything structure properly when the company is formed and setup, then maintained and kept up to date. Most start-up or small businesses don’t have the resources to do this, despite the fact that it would save them tons of time and money down the road, not to mention assuring that their personal assets aren’t at risk.
The problem is that the owners or management don’t realize the major risks to their own assets and personal livelihood can be in jeopardy. Just because you have a LLC or corporation formed doesn’t mean there are not any major landmines. I have seen many business owners come to me having to file for personal bankruptcy because their lives and their families lives were ruined by a business failure in which they thought they were protected. Some lose their homes or personal assets, like savings accounts as well.
Some examples of how this can happen are failure to keep adequate workers compensation insurance in California or properly withhold and deposit enough payroll taxes for your employees. The owners, directors, officers, and management can face personal liability for all of these liabilities, even if the company is a corporation and no personal guarantees were signed by those individuals.
There are ways to protect yourself personally and your assets from business issues, but the best way to handle this before it ever gets to your personal assets is to be sure your business and business assets are properly protected and structured. This can be done at any time, but if you wait until after the fire starts, it will be much more difficult to put it out the longer you wait.
There are many ways to protect your business and assure it is being properly run. One of the best ways to see how healthy your business is would be to get a business check-up, sometimes called a legal check-up or business legal audit.
We provide a free initial consultation to take a look at your current business structure, operations, finances, assets, liabilities, insurance, record keeping, and risks. We can devise a plan of action and strategies on how to improve the health of your business. This is even more important if the business is not doing well financially, because that is usually when the problems are going to start or get worse.
Contact me, your California business attorney, to give you a free consultation and check-up for your business. I can give you a no obligation review and idea on what steps you should take and any costs or fees involved to get the business back up to speed and protect not only the company, but your personal assets.
Litigation in California is big business for plaintiffs’ lawyers and state agencies take no mercy on shutting down companies and taking the owner or management’s assets.