Asset Protection & Business Structuring

Asset Protection

Asset protection is the use of effective legal strategies designed to protect your business and personal assets. Insurance may only take away the risk in certain business circumstances. If you have assets in your personal name, they could be at risk. Any lawsuit from a creditor or a disgruntled former employee for the non-payment of a debt (knowingly or unknowingly) may cause business owners undue stress and possibly significant losses. It is prudent to have a reliable and effective asset protection strategy in place so that you can continue to accumulate your wealth and achieve your financial objectives.

Business Structuring

It’s important to keep any valuable business assets in a separate entity, not held by your trading entity, so that you still have the business assets available to continue operating, should the trading entity be wound up. Any factory, office or property should also be safeguarded in this manner.

Once the assets of the business have been protected, it is important to consider what legal agreements should be put in place between shareholders and directors.

A shareholder’s agreement is a legally binding contract that exists between the shareholders and directors of a company. The shareholder agreement outlines the key operations and management of the company. It details various aspects, including:

• the roles and responsibilities of shareholders and directors;
• how directors will conduct board meetings;
• entering and exiting the company; and 
• how important decisions of the company will be made. 

If you are setting up a company that will have more than one shareholder, it is important that you draft a shareholder’s agreement. Importantly, you want to tailor this agreement to the best interests of your company and likewise consider the future goals of the company. A shareholder’s agreement will also assist when a dispute arises between directors and/or shareholders.