Overview of Corporations
The chief purpose of a corporation is to insulate the owner's personal assets (or the assets of other businesses) from the debts of the business. You can achieve this same objective with a limited liability company (LLC). But unlike the LLC, the corporation is a poor entity to protect personal assets. The two major drawbacks from using the corporation as a personal asset protector are:
- assets you transfer to and from the corporation create various consequences, and
- your personal creditors can seize whatever shares you own in the corporation - as well as obligations due to you from the corporation
The limited liability company (LLC) and limited partnership (LP) overcome these corporate disadvantages. They thus play a more important role in personal asset protection planning.
YES, YOU CAN LOSE EVERYTHING!
You may think that your wealth is safe and that you don't need protection. But don't delude yourself and accept reality -
for every 60 minutes you spend making money, spend 60 seconds thinking about how to protect it!