Asset protection is a form of planning that is intended to protect one’s assets from creditor claims. Business entities and individuals utilize asset protection strategies to limit creditors’ access to particular assets. One of the more utilized approaches for asset protection is operating a business as a corporation including S-Corp, C-Corp, or LLC. However, there are many myths surrounding this method.
If you are a new business owner, acting as a corporation or sole-proprietor, you may be required to apply for an Employer Identification Number (EIN). To apply online, Gov Doc Filing offers an EIN filing service that simplifies the process.
Common Asset Protection Myths:
- A single entity, such as a corporation or LLC, is all that you need.
Generally, the best course to take is a combination of entities, instead of one corporation, limited partnership, or LLC.
- Liability insurance protects you against lawsuits.
While limited insurance provides some protection against lawsuits, its coverage is limited. In many cases, juries award judgments that are in excess of the defendant’s coverage. Furthermore, your policy may have exclusions that can result in denial of coverage, leaving you liable.
- I do not need asset protection because I do not believe I will be sued.
For most business owners, this is a matter of “when” not “if” you get sued. Odds of avoiding a lawsuit as a business owner is very small.
- You should operate your business as a Sole Proprietor.
Although there are some tax advantages to sole-proprietorship, you have zero protection against lawsuits.
- Asset protection is only for the very wealthy.
Your business, home, and other personal property are at risk without asset protection, regardless of wealth. If you have assets you cannot afford to lose, you need protection.
For a simple to understand, secure Tax ID application, visit Gov Doc Filing where they provide 24/7 support.
The best thing today is that you can check out everything online and make your search and things easy for yourself. You can learn about these forms online and also check them out online and make your process easy and time saving.
New business people have least idea about all such tax application forms and thus it is important for them to learn about them and gain useful information. Online information can be best and you can check out for it anytime and anywhere. So, learn about asset protection myths and protect your assets which means a lot for you.
Daryl Green