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OAKVILLE BEAVER Thursday, October 22, 2009 · 16 DO YOU OWN A BUSINESS? Are Your Business And Family Assets Protected In The Event Of A Lawsuit Or Bankuptcy? The Incorporators Will Build A Corporate And Personal Asset Structure For You That Will Ensure Such A Situation Does Not Occur. 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 suits 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 businesses. 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 seven years. Are Your Business And Family Assets Protected In The Event Of A Lawsuit Or Bankruptcy? The IncorporatorsTM Will Build A Corporate And Personal Asset Structure For You That Will Ensure Such A Situation Does Not Occur. DO YOU OWN A BUSINESS? Why Should I Have `The IncorporatorsTM' Incorporate My Business? · Our rates are one-third to one-half that of our competition. · The Articles of Incorporation that we prepare for you will be designed in such a way as to provide you with maximum flexibility in your corporate and personal income tax planning. · We have been incorporating companies for almost twenty-seven years. Voted First Place Diamond Award Winners In The Categories of Incorporation Services, Tax Preparation Services And Business Advisory Services 7 YEARS IN A ROW! Who Should Incorporate? · Any business whose annual net profit is in excess of $20,000; · Any business which has a risk of being sued which in today's litigious society is just about everybody. Why Should I Incorporate My Business? Member of & ED FOSTER · · · · To pay less income tax. To protect your business and family assets from your creditors. To give your business greater credibility. To protect your business name. SERVING SMALL AND HOME BASED BUSINESSES FOR ALMOST 27 YEARS 905-469-8777 ADVISORY COMMITTED TO REDUCING THE INCOME TAXES THAT YOU PAY www.thetaxadvisory.ca THE TAX INCORPORATORSTM COMMITTED TO INCORPORATING YOUR COMPANY THE RIGHT WAY THE FIRST TIME www.theincorporators.ca THE ADVISORY COMMITTED TO MAKING YOUR BUSINESS A SUCCESS THE BUSINESS www.thebusinessadvisory.ca