Asset Protection
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Very prudent. I attempt to use a similar "sole remedy" clause in every contract.
My Blog A human being should be able to change a diaper, plan an invasion, butcher a hog, conn a ship, design a building, write a sonnet, balance accounts, build a wall, set a bone, comfort the dying, take orders, give orders, cooperate, act alone, solve equations, analyze a new problem, pitch manure, program a computer, cook a tasty meal, fight efficiently, die gallantly. Specialization is for insects. - -Lazarus Long
And be careful who you work for and what jobs you take on. I once had the Technical Director of one of our large public companies contact me to help assess the usefulness of one of their concrete products for a large airport in Asia. They wanted to know the effect of it on the airport radar and radio navigational aids. An interesting project until his closing comment "and you do have imdemnity insurance don't you, we are currently in the process of suing one of our consultants". Add that to a quick calculation of the damage his concrete building could do to a fully laden jumbo or two, and I never followed up on his call.
Peter "Until the invention of the computer, the machine gun was the device that enabled humans to make the most mistakes in the smallest amount of time."
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And be careful who you work for and what jobs you take on. I once had the Technical Director of one of our large public companies contact me to help assess the usefulness of one of their concrete products for a large airport in Asia. They wanted to know the effect of it on the airport radar and radio navigational aids. An interesting project until his closing comment "and you do have imdemnity insurance don't you, we are currently in the process of suing one of our consultants". Add that to a quick calculation of the damage his concrete building could do to a fully laden jumbo or two, and I never followed up on his call.
Peter "Until the invention of the computer, the machine gun was the device that enabled humans to make the most mistakes in the smallest amount of time."
:) Reminds me of a recent job I turned down. This one involved federal level political campaign management. When it was brought to me, in my minds eye I could see the newspaper headline "Candidate blames software" :laugh:
My Blog A human being should be able to change a diaper, plan an invasion, butcher a hog, conn a ship, design a building, write a sonnet, balance accounts, build a wall, set a bone, comfort the dying, take orders, give orders, cooperate, act alone, solve equations, analyze a new problem, pitch manure, program a computer, cook a tasty meal, fight efficiently, die gallantly. Specialization is for insects. - -Lazarus Long
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:) Reminds me of a recent job I turned down. This one involved federal level political campaign management. When it was brought to me, in my minds eye I could see the newspaper headline "Candidate blames software" :laugh:
My Blog A human being should be able to change a diaper, plan an invasion, butcher a hog, conn a ship, design a building, write a sonnet, balance accounts, build a wall, set a bone, comfort the dying, take orders, give orders, cooperate, act alone, solve equations, analyze a new problem, pitch manure, program a computer, cook a tasty meal, fight efficiently, die gallantly. Specialization is for insects. - -Lazarus Long
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A simple answer is that it is a lot of mis-direction or as my attorney likes to say "adding layers to the onion". What it boils down to is using multiple legal structures to hide / remove ownership of assets and companies.
My Blog A human being should be able to change a diaper, plan an invasion, butcher a hog, conn a ship, design a building, write a sonnet, balance accounts, build a wall, set a bone, comfort the dying, take orders, give orders, cooperate, act alone, solve equations, analyze a new problem, pitch manure, program a computer, cook a tasty meal, fight efficiently, die gallantly. Specialization is for insects. - -Lazarus Long
Sounds like encapsulation or virtualization. Now you're talking a language CPians can understand! :)
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Not the digital kind :) Last year, a business associate was recently taken to the cleaners b/c she was acting as a sole proprietor in her business. She failed to perform on a deal and rather than just fair restitution, judgments were placed on all of her personal and business assets. Pretty sad and scary at the same time. After seeing this, I called my attorney and wanted to make sure that something like this could never happen to my family. So, I am just about to finish the last of paperwork regarding protecting my personal assets from anything that may happen in my businesses and vice versa. I have to say, it's pretty wild. When we are done filing the paperwork with the county, state, Nevada, and two foreign countries I won't "own" anything; not even a checking account. Anybody else done this? I hate going to this extreme but case law really seems like it is over-compensating people for minor damages.
My Blog A human being should be able to change a diaper, plan an invasion, butcher a hog, conn a ship, design a building, write a sonnet, balance accounts, build a wall, set a bone, comfort the dying, take orders, give orders, cooperate, act alone, solve equations, analyze a new problem, pitch manure, program a computer, cook a tasty meal, fight efficiently, die gallantly. Specialization is for insects. - -Lazarus Long
I have read all the comments posted about Asset Protection. I am looking to start my own web site. Before people join I will have them agree to terms of use. Before reading all these comments I thought that would be enough to stop anyone or company from sueing me. Does anyone have any suggestions to someone who is new to the business world? Should I get an LLC before I start the web site? How do I transfer money from what my web site makes to my personal account (One comment suggested declaring myself as an employee with a salary)? Do I even need to declare a Business for my web site? Chris
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Not the digital kind :) Last year, a business associate was recently taken to the cleaners b/c she was acting as a sole proprietor in her business. She failed to perform on a deal and rather than just fair restitution, judgments were placed on all of her personal and business assets. Pretty sad and scary at the same time. After seeing this, I called my attorney and wanted to make sure that something like this could never happen to my family. So, I am just about to finish the last of paperwork regarding protecting my personal assets from anything that may happen in my businesses and vice versa. I have to say, it's pretty wild. When we are done filing the paperwork with the county, state, Nevada, and two foreign countries I won't "own" anything; not even a checking account. Anybody else done this? I hate going to this extreme but case law really seems like it is over-compensating people for minor damages.
My Blog A human being should be able to change a diaper, plan an invasion, butcher a hog, conn a ship, design a building, write a sonnet, balance accounts, build a wall, set a bone, comfort the dying, take orders, give orders, cooperate, act alone, solve equations, analyze a new problem, pitch manure, program a computer, cook a tasty meal, fight efficiently, die gallantly. Specialization is for insects. - -Lazarus Long
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A simple answer is that it is a lot of mis-direction or as my attorney likes to say "adding layers to the onion". What it boils down to is using multiple legal structures to hide / remove ownership of assets and companies.
My Blog A human being should be able to change a diaper, plan an invasion, butcher a hog, conn a ship, design a building, write a sonnet, balance accounts, build a wall, set a bone, comfort the dying, take orders, give orders, cooperate, act alone, solve equations, analyze a new problem, pitch manure, program a computer, cook a tasty meal, fight efficiently, die gallantly. Specialization is for insects. - -Lazarus Long
Why isn't just forming an LLC enough? What "layers" can you add to the "onion"?
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Not the digital kind :) Last year, a business associate was recently taken to the cleaners b/c she was acting as a sole proprietor in her business. She failed to perform on a deal and rather than just fair restitution, judgments were placed on all of her personal and business assets. Pretty sad and scary at the same time. After seeing this, I called my attorney and wanted to make sure that something like this could never happen to my family. So, I am just about to finish the last of paperwork regarding protecting my personal assets from anything that may happen in my businesses and vice versa. I have to say, it's pretty wild. When we are done filing the paperwork with the county, state, Nevada, and two foreign countries I won't "own" anything; not even a checking account. Anybody else done this? I hate going to this extreme but case law really seems like it is over-compensating people for minor damages.
My Blog A human being should be able to change a diaper, plan an invasion, butcher a hog, conn a ship, design a building, write a sonnet, balance accounts, build a wall, set a bone, comfort the dying, take orders, give orders, cooperate, act alone, solve equations, analyze a new problem, pitch manure, program a computer, cook a tasty meal, fight efficiently, die gallantly. Specialization is for insects. - -Lazarus Long
Yes, I formed a corporation instead. There is no distinct link between the corporation and the personal assets of its owners or employees - a corporation is a separate legal business entity, unlike when a sole proprietorship. All soemone can sue for is the assets of the corporation, which in my case might have been a desk, a couple chairs, and a few computers.
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It's crap like this that makes me feel that Business Law 101 should be a required course for all university students, at least in the U.S.
Jon Sagara Once again, the conservative sandwich-heavy portfolio pays off for the hungry investor! *slurp* Oh, I'm ruined! -- Dr. Zoidberg .NET Blog | Personal Blog | Articles
How many people do you suppose it occurs to that all this trouble is because of attorneys, ultimately? I think William Shakespeare was well aware of this problem.
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And watch those credit cards with your name on it. Company defaults and they go after you. Also learned that the hard way :(( - Never get American Express cards Lena
Hi guys: I'm on the Code Project mailing list for the sake of my computer geek preppie son and not at all technologically literate. However, I may be a source of some help in this area as I am CPA & lawyer. This general area is something you should all be concerned (but not overly obsessed) about. The big key is to hook up with a good business formation attorney who can take you through the drill re. incorporation v. LLC, etc. This stuff varies by state. There are set up costs as well as annual filing fees/franchise taxes. Plus there are tax impications that need to be monitored re. paying salary/distributions to you the owner/employee. You also need to reconcile yourself to the fact that you are going to need to pay an accountant to tie up your books at least once a year for the IRS; probably quarterly as you need to report all payroll to IRS four times a year. The best thing I can say to all of you is that you should look a lawyers not as vultures, but as doctors. If you or a loved one are sick, you want the best doctor you can get, not the cheapest. And you want him to run all the tests necessary (but not any unnecessary ones). In fact you are best getting a physical every year to avoid bigger problems later. It really is the same with a good business lawyer and accountant for all you self employed entrepreneurial types out there. (As an aside, a good CPA is even more important than a good lawyer in my experience; and, I hasten to add that I do not actively practice as a CPA even though I have the ticket.....lawyers make a lot more money, at least here in Mass......hence they will likely cost you less money on an ongoing basis and prevent legal and tax problems that will cost more money for a lawyer to fix.) Hope this is of some assistance. I am a director of the American Association of Attorney-CPAs and have a huge referral network if any of you want to avail yourself of it. Best of luck to all. John Pramberg, Esq. email: johnwprambergesq@verizon.net phone: 978.462.7818
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A simple answer is that it is a lot of mis-direction or as my attorney likes to say "adding layers to the onion". What it boils down to is using multiple legal structures to hide / remove ownership of assets and companies.
My Blog A human being should be able to change a diaper, plan an invasion, butcher a hog, conn a ship, design a building, write a sonnet, balance accounts, build a wall, set a bone, comfort the dying, take orders, give orders, cooperate, act alone, solve equations, analyze a new problem, pitch manure, program a computer, cook a tasty meal, fight efficiently, die gallantly. Specialization is for insects. - -Lazarus Long
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All told, I have 6 LLCs, 1 Corp & 1 S-Corp. Not to mention a couple of trusts and a limited partnership. Before this process I had two LLCs. But, suprizingly is not enough if you have ever co-mingled your business and personal funds or if you a listed as an officer in the companies.
My Blog A human being should be able to change a diaper, plan an invasion, butcher a hog, conn a ship, design a building, write a sonnet, balance accounts, build a wall, set a bone, comfort the dying, take orders, give orders, cooperate, act alone, solve equations, analyze a new problem, pitch manure, program a computer, cook a tasty meal, fight efficiently, die gallantly. Specialization is for insects. - -Lazarus Long
Chris Austin wrote:
Before this process I had two LLCs. But, suprizingly is not enough if you have ever co-mingled your business and personal funds or if you a listed as an officer in the companies.
Co-mingling at a minimum demonstrates ignorance and perhaps laziness. At worst it can indicate an attempt to defraud. Which is why it is grounds to challenge the legality of a business entity. Any business entity, even a sole proproitership, should manage funds separate from each other business entity including personal.