When going into business, it is tempting to focus on your product or service. Here are some things entrepreneurs can do to help protect personal assets:
1- Adopt a company structure: This is much safer than being a sole trader because you can then trade in the name of the company.
2- Protect the family home: Ensure the family home is owned by the family member who is not a director of the business or by a discretionary trust. It is important that the transfer occurs early.
3- One family member director: Limit the number of family members who are directors of the company. Ensure they are not the party holding property.
4- Avoid or limit personal guarantees to company creditors.
5- Put contracts in writing: Contracts can protect you by identifying that it is the company doing business, not the entrepreneur personally and by limiting liability.
For more information, please do not hesitate to contact Caroline Mense, Principal Lawyer at Legal Enablers Pty Ltd on firstname.lastname@example.org
Disclaimer: All material in this article is general in nature. For specific advice for your circumstances, please seek legal or accounting advice.