Tips on How to Protect Yourself in Business
What Happens When Your Great Sales Deal Goes Bad?
It's a salesperson's job to meet with people and execute business deals on an everyday basis – what happens when a business deal, and this inevitably always happens, goes south and you get sued? Or, what if the person you were dealing with just didn't love the outcome of a particular deal? There are so many frivolous lawsuits getting into courts these days, don't allow yourself to be one!
The best answer to this dilemma is to make sure that you act defensively by following appropriate business precautions. Also, you must make sure that your personal and business assets are bulletproof, so that even if you get sued – no one can take anything from you!
The first step to becoming bulletproof is easy; educate yourself! Learn as much as you can about Asset Protection and Business Law. This will help you stay one-step ahead of the lawsuit game that so many people play.
The second step is to make sure that your business deals are well documented and smoothly executed. Here are some tips to achieve this:
- Don't use your personal name. Always incorporate and negotiate deals in the capacity of an entity separate from your own name. That way, your personal assets stay 100 percent safe.
- Get everything in writing.Make sure you have an iron clad agreement that stipulates exactly what each party to a business deal should be providing and any requisite benefits expected. Assume nothing! If an agreement states that you have fulfilled your end of a bargain, a frivolous lawsuit can be more easily thrown out of court.
- Document and safeguard all communications. Always keep all documentation in a safe place (emails, contracts/agreements and any other relevant documents). That way, if you are sued, you have ample proof that you are on the right side of the law.
- Have witnesses at meetings. Ask a colleague or trusted advisor to sit in on any important meetings and/or meetings where you are finalizing major details of a business deal. It's always better to have an extra set of eyes and ears to attest to a claim than just your own.
- Do your research! Run credit reports and check references on anyone you intend on executing a business deal with. You might find other sour deals in that person's past; which is key to know as any future dealings occur.
Finally, for those times when a person intends on suing you frivolously, the final step is to make yourself an "unattractive" lawsuit candidate. If you don't have any assets to take — there's no incentive for a potential plaintiff to tie themselves up in the court systems with a lawsuit.
Here are five great tips that can aid you in making yourself an unattractive lawsuit candidate:
- Convert your non-exempt assets into exempt assets. Certain State laws protect certain personal assets from lawsuits and creditors. Find out the exemptions for your state and convert non-exempt assets (i.e. cash) into exempt assets (i.e. life insurance).
- Transfer your assets to a protective entity. The key to asset protection is to own nothing while controlling everything. Transfer any non-exempt assets out of your name to protective entities such as trusts, LLC's (limited liability companies), limited partnerships, etc.
- Utilize International asset protection. Enjoy an even greater degree of privacy and debtor protection with the many additional legal and procedural obstacles that creditors have to face in International jurisdictions.
- Protect your assets with liens. Take out lines of credit. Record mortgages against your property. Make all of your assets valueless. What is a $100,000 car worth if you owe $95,000? What is a $1 million house worth if you owe $950,000?
- Keep your plan up to date. Laws change every year. Have your plan reviewed yearly.
By following these three steps and essential tips – you will be well on your way to financial security!
