How Do I Know What Kind of Business Planning I Need?
Most Oregon business owners start their businesses by navigating as best they can to file LLC articles with the Secretary of State and then forgetting about it (other than their annual filing) until something happens where they face being sued, or they hear about another business owner getting sued, and they think to themselves, "Oh my goodness, am I really protected?"
When it comes to asset protection, the only real way to know if you are protected is to meet with a business planning lawyer to discuss your situation and get their professional opinion on it.
And by the way, once you've been sued, it's too late to go back fix anything you didn't plan properly.
The lawyer is going to look at a few things: 1) The assets that you own. 2) The assets that your business owns. 3) The foundational set-up of your business. 4) The business habits you have. 5) The risk involved in your particular type of business. 6) Ways that you have mitigated risk.
1) The assets that you own
If you own any assets, that puts you more at risk of facing a lawsuit. One of the first things an attorney will want to know if they aim to sue you is whether they will be able to collect a judgment against you. So they'll do an asset search to see what assets they'll eventually be able to collect against. And if your LLC or other business entity isn't set up properly, your assets are not protected.
2) The assets that your business owns
In addition to your business assets, your lawyer will want to know what assets your business owns. If your business isn't set up properly, your business assets will not only be at risk if you're sued in your capacity as business owner, but also if you are sued personally, have any personal creditors, or go through a divorce.
3) The foundational set-up of your business
The lawyer will want to see what you did from the beginning to set up your business. They'll want to know if you simply filed articles with the state or whether you have a governing document, like and Operating Agreement and/or Bylaws, and if you do, whether it is a document you printed off and don't understand or whether it reflects your actual plan for your business.
4) The business habits you have
Your lawyer will want to see what your business habits have been. They'll want to know whether you kept business and personal assets and finances separate, whether you did annual minutes, whether you kept good records. The lawyer will be looking to see whether you've been treating your business as a real business and not just an expensive hobby.
5) The risk involved in your particular type of business
Your lawyer will want to know about the particular types of risks involved in your business. Some businesses--like brick-and-mortar businesses, food businesses, businesses involving physical activity, and many more--carry a very high risk of injury and damages, and thus, a lawsuit. In situations like that, asset protection must be taken very seriously.
6) Ways that you have mitigated risk
Your lawyer will want to know about ways that you've mitigated your risks, namely, through insurance, waivers, and contracts. They'll want to know if you have liability coverage and how much, as well as whether you have a personal umbrella policy. They'll want to know if you have waivers and contracts and whether those documents are sufficient to protect you or if they needed added terms and language to be effective.
You don't know if you've planned properly until you have a business planning lawyer assess your situation. Don't forget that once you've been sued, it's too late to protect yourself.
If you want to get started, read about our business services and schedule an appointment.
To your family's health + happiness,
Candice N. Aiston
P.S. Here's another post about business planning and how to get started.
___
Want to use this article in your newsletter or on your blog or website?
You can! Just please be sure to use this complete blurb with it:
Candice N. Aiston is an Legal Planning Attorney for Estates + Businesses in the Portland, Oregon area. She helps people to prepare for a lifetime of security, prosperity, and guidance. If you would like to receive her free reports, please visit http://aistonlaw.com/ to sign up. Follow her Facebook page for daily planning tips: https://www.facebook.com/aistonlaw/.