Small Business Corporations. Many small businesses are run by companies. You have the radio ads, you must protect your home and bank accounts, debts from the business by your company but a company belongs.
Stock not protected. But what protects your shares in your company that owns your company? In contrast to a Virginia or Delaware LLC, a court to pay for the seizure and sale of the stock of your company to judgments against you.
PeterSpengler. Peter Spengler has a successful plumbing company (Peter Spengler, Inc.) with 20 employees, ten trucks and 3,000,000 dollars a year in sales. One night he has a terrible car accident while he was on his way home from work. It ends, loses its claim on the accident and a verdict for 5,000,000 dollars is personally committed against him. His car insurance pays only $ 500,000 of the Court. The defense lawyer for the victim comes to Peter for the remaining$ 4,500,000. The trial lawyer gets a court order for the sale of all shares owns in St. Peter Spengler, Inc. to lose, in addition to the bulk of his fortune.
Just Another asset. Whether in Microsoft ® or shares in Peter Spengler, Inc., corporate stock is treated as an asset like a bank account or real estate and can be sold on the courthouse steps. In my experience, most entrepreneurs do not know.
What should be done. To protect your shares in your company, here are some of thethe techniques. Each of them has advantages and disadvantages:
1. Buy Sell. Take buy one and sell agree that the sale of your shares in the case, it is taken by a court mandates.
2. Use an LLC. Consider setting up your company as a limited liability company (LLC) in a state where the LLC interests are protected. Consider a corporate tax election for the LLC. More on that later.
3. Convert. If you are a business, check with your advisorFeasibility of converting to a LLC. Be aware that the IRS do not believe such a sales conversions, and that if you pay too much tax.
4. To separate assets. Are all of the assets that you use in your business from a separate LLC to rent the property and assets from these LLC. For example, Peter Sanitation Systems, Inc. does not own the vehicles or their stock. The vehicles are powered by a separate LLC, as well as the one hall.
5. LLC have your own shares. If you are a C-Corporation,Company pays taxes to have their shares held by an LLC, which is protected in the property. If you have an S-Corporation that pays no corporate tax, there is a special form of the LLC to be used. More on that later.