Asset Protection

Many businesses have built up wealth over a number of years of trading and it is important to examine ways of protecting assets during difficult trading conditions. Directors have responsibilities covered by company law which is especially important during times of possible insolvency. It may be the business is not sure how long it can continue trading profitably and the owners wish to secure the wealth generated over a number of years.

Professional advice is essential to review what is possible, and how this can be achieved. An adviser will need to understand the balance sheet of the business, the trading conditions, and discuss with the directors the overall business and where there are other shareholders discuss their protection.

Asset protection strategies are best adopted before there are financial problems – these will include using a number of different legal entities to hold forms of property – eg real estate, machinery or assets – thus in the event one business is in financial difficulties it does not affect all the business assets.

Limited liability companies are a form of legal entity that does provide limited liability protection.

So whatever your position it is important to discuss how to protect assets – banks often take fixed and floating charges over assets within a company and agreements over companies within a group, so it really important to think ahead abut asset protection and take professional advice.

Intellectual property – patents are often held by a separate company so that in the event of a failure, the intellectual property is preserved for the future.

Small business owners often overlook this important aspect – for example protecting your home and personal assets – lenders often ask for personal guarantees which may be used in the event of a business failure. Large companies are aware of the problems and use both lawyers and accountants to provide advice – however, small business owners can be wise before the event if they use quality advisers, ring us now to discuss.

Talking through the options will open up ways of protecting the assets involved. An experienced adviser will make this a relatively straightforward process and the solutions will become obvious. The adviser will be able to show this can be achieved.