posted byBagasian LawFebruary 10, 2021
Hiring a lawyer to help manage business assets will protect your tangible and intangible assets.
Asset management is often thought of in terms of personal assets, such as a trust fund. But, asset management becomes increasingly complex when it involves large sums of money, which is often the case when managing business assets.
In this article, we will discuss:
First and foremost, let’s define asset protection , which essentially means guarding or protecting your wealth, such as the parts of your business that have a monetary value.
Asset protection is a facet of debtor-creditor law , ensuring that your business is protected from creditors or those you owe money to. In simple terms, a creditor lends money with the assumption that it will be paid back in the future.
Think about it this way. If one owes creditors money, they are responsible for paying back these debts. If they cannot, they must file for bankruptcy.
However, in the case of a business, there are large assets at play. Therefore, it is important to manage your business assets and form an asset protection plan.
Additionally, depending on the type of business you own, your liability may vary.
Owners of limited partnerships, for example, are only liable for the percentage they invested in the business. Limited liability corporations (LLCs) and corporations also function under similar limited liability laws.
One of the most important reasons for developing an asset protection plan is that it can help businesses avoid costly lawsuits.
The first type of asset protection we are going to discuss is an Asset Protection Trust (ATP) .
An ATP protects a business’s assets from creditors and lawsuits. A business can place its assets in an ATP, which can either be set up domestically or internationally.
Domestic accounts can be set up in the United States, however, they are subject to U.S law, providing businesses with less protection.
If an account is set up internationally, often referred to as an offshore account, those assets are not subject to U.S law, such as debtor-creditor laws or bankruptcy laws.
As previously mentioned, some types of businesses have limited liability that protects them from litigation.
Therefore, one way to protect your business assets is by incorporating for by forming a Limited Liability Corporation (LLC). This protects your personal assets from creditors going after your business.
In other words, rather than being fully liable for your business as an independent contractor, your business partner is also liable.
In order to properly manage your assets, it is important to take note of what kind of assets your business has.
Most simply, assets are categorized as either tangible or intangible.
Tangible assets are defined as those that your business physically owns, such as a building, inventory, and equipment.
On the other hand, intangible assets are defined as those that have monetary value but do not exist physically. For example, this can be a trade secret, a patent for a product you make, or copyright.
Intangible assets are also often defined as “intellectual property,” and they can be managed through licensing agreements, copyright, and patent contracts.
Both tangible and intangible assets hold value, and both must be noted and managed, not only in terms of collections cases but also for investors to value the company. Sometimes intangible assets have much greater value than tangible assets.
A professional business attorney can help protect and manage your business assets in several ways.
First, a business attorney can help draft contracts to protect both tangible and intangible assets. This can include filing patent applications, acquiring a copywriting or trademark license, or drafting non-disclosure agreements (NDAs).
For example, if your business has patented a product or invention, an attorney will help them file a patent application. An attorney will also know which type of patent to file and will have an understanding of the legal implications of the process.
In this case, without an attorney, mistakes may mean the patent application is rejected.
Additionally, a business attorney can help incorporate your business or establish an LLC or LP.
To form an LLC, you must file articles of organization, which have different requirements based on which state you are forming it in. Depending on the state, your LLC will have to abide by a set of laws that define how the LLC can operate.
Additionally, an LLC can be sued in a court of law. These legal implications are best understood by a business attorney, who will ensure that your LLC is created and operates legally.
As a business owner, it is important to protect your assets. Hiring legal representation ensures your business and its tangible and intangible assets are protected.
From helping form an LLC to establishing patents, a lawyer will ensure the safety of your business assets.
Los Angeles-based lawyer, Alina Bagasian, will provide the best legal services for your business. Possessing an understanding of corporate and commercial business, Alina Bagasaian is ready to represent your business and provide you with excellent legal advice.
The Law Offices of Alina Bagasian have achieved 100% client satisfaction, providing clients with unlimited advice, and offering eight different services to avoid any legal complications when running a business.
Get the help you need today!