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www.oakvillebeaver.com Did you know... The question is what can you do to prevent such an occurrence. Some businesses are relatively benign when it comes to the exposure to Lawsuit but others have a high degree of risk. If your business is in the latter category, here are some of the steps you can take to minimize your exposure: Step 1 Incorporate your business; in this way, any lawsuits would be limited to the assets of the Corporation; the foregoing would also apply to any claims your creditors might have in the event of a bankruptcy. Step 2 If your business is capital intensive, incorporate a separate company to hold all the major assets of the business; again, should a lawsuit be filed against the Company or your business fail, there will be no assets for your creditors to attach. Step 3 If your business is made up of more than one distinct business, it may be wise to incorporate separate companies for each business as, if one business fails you will not lose the other Oakville's SPOTLIGHT The Oakville Beaver, Wednesday January 14, 2009 - 9 that if you own a business and you go bankrupt or are sued, you can lose not only your business assets but also your family assets? Step 4 Only one spouse should be a Director of the Corporation as well as being all The statutorily required (President, Chairman Of The Board, Secretary-Treasurer) officers.All family assets including the house, bank accounts, mutual funds, investments, etc. should be transferred into the name of the remaining spouse. In this manner, should certain liabilities survive the corporate umbrella, once again, there will be no assets in the hands of the Director for the creditors to attach. You cannot do this after legal proceedings have begun. Step 5 Transfer all your investments and RRSP's to funds that are administered by life insurance companies as creditors cannot attach any funds held under the life insurance `umbrella'. In addition, some life insurance companies will guarantee your capital even if the life insurance company itself goes bankrupt. Written By E. L. Foster, President of The Incorporators / The Tax Advisory / The Business Advisory Inc., Oakville Beaver Readers' Selection First Place Diamond Award winners in the categories of Incorporation Services, Tax Preparation Services and Business Advisory Services for the last six years. 2 25 ARE YOUR BUSINESS AND FAMILY ASSETS PROTECTED IN THE EVENT OF A LAWSUIT OR BANKRUPTCY? 25 25 25 ciety 25 25 25 25 YEAR YEARS YEARS ARS YEARS YEA 25 25 2 25 Y YEA YEARS YEARS YEA YEARS ARS 25 25 2 25 YEARS YEA YE YEARS YEA YEARS ARS 2 25 25 2 25 PLACE DIAMOND AWARD WINNERS IN THE CATEGORIES 25 VOTED FIRST Y YEA YEARS SERVING SMALL YEAR YEARS YEARS EARS ARS YEARS OF INCORPORATION SERVICES, TAX PREPARATION SERVICES ES 2 BUSINESSES 5 25 25USINESS ADVI256 YEARS IN A ROW25 AND HOM FOR 5 YEARS YEARS YEARS YEARS OVER 2 25 25 25 25 YEARS YEARS YEARS 25 25 25 25 INCORPORATORS YEARS YEARS YEARS YEARS 25 25 25 25 YEARS YEARS YEARS YEARS Who Should Incorporate? yb ss whose annual ne ss of $20,000; Any b si ss which has a risk of being sued which in today's litigiou is just about everybody. INCORPORATING YOUR COMPANY WILL PROTECT YOUR BUSINES S AND FAMILY AS SETS. Why Should I Incorporate My Business? income tax. your business and f · To give your business greater credibility pr t your business name. our creditors. Why Should I Have `The Incorporators' Incorporate My Business? ED FOSTER are one-third to one-h our competition. · The Articles of Incorporation that we prepare for you will be designed in y as to provide you with maximu exibility in your corpo ate and personal income tax planning. een incorporating comp twenty-five years ADVISORY THE TAX THE ADVISORY THE BUSINESS COMMITTED TO REDUCING THE INCOME TAXES THAT YOU PAY www.thetaxadvisory.ca COMMITTED TO INCORPORATING YOUR COMPANY THE RIGHT WAY THE FIRST TIME www.theincorporators.ca www.thebusinessadvisory.ca COMMITTED TO MAKING YOUR BUSINESS A SUCCESS