www.oakvillebeaver.com The Oakville Beaver Weekend, Saturday April 21, 2007 - 27 HOW TO It's true. 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, PROTECT YOUR HOME AND PROCESSIONS WHEN OWNING A BUSINESS The Incorporators, The Tax Advisory, The Business Advisory 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 statutorilly required (President, Chairman Of The Board, SecretaryTreasurer) 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 and Chief Executive Officer of The Incorporators /The Tax Advisory / The Business Advisory, 2006 Oakville Beaver Readers' Selection First Place Diamond Award winners in the categories of Incorporation services, tax preparation services and business advisory services. Ed established the Company on June 30, 1983 to service the small and home "Some businesses are relatively benign when it comes to the exposure to Lawsuit but others have a high degree of risk." based marketplace. Prior to setting up the Company, he had 22 years of proven corporate experience at both the domestic and international levels in both the private and public sectors. Ed has held the positions of Vice President and Chief Financial Officer, Assistant General Manager, Director of Manufacturing, Director of Operations and Director of New Business Development providing him with the experience necessary to serve clients with a high level of compe- tence. Ed is a member of the Oakville Chamber of Commerce and recently sat on its Home Based Business, Small Business, Strategic Marketing and Small Business Week Committees. He is also a member of the Burlington Chamber of Commerce where he sits on the Membership Committee. THE THE TAX INCORPORATORS Incorporating Businesses Since 1983. Combining The Best Of The Legal, Business And Income Tax Planning Processes. n ADVISORY Providing Personal And Corporate Income Tax Planning And Tax Preparation ServicesTo Companies And Individuals Since 1962. THE BUSINESS ADVISORY Providing Ideas For Sales Growth And Solutions To Business Problems To Small And Home Based Business s Since 1983. If you own a business, shouldn't you be having your corporate and personal income tax returns prepa red by someone who also specializes in advising small and home-based businesses? a The Incorporators/The Tax Advisory/The Business Advisory Inc. has been providing business and personal income tax planning and tax preparation services to businesses and individuals since 1962 Voted First Place Diamond Award Winners In The Categories of Incorporation Services, Tax Preparatio n Services And Business Advisory Services o Member Of For More Information Please Call Us At (905) 469-8777 Or Visit Us At One Of Our Websites COMMITTED TO REDUCING THE INCOME TAXES THAT YOU PAY www.thetaxadvisory.ca Member of COMMITTED TO INCORPORATING YOUR COMPANY THE RIGHT WAY THE FIRST TIME www.theincorporators.ca COMMITTED TO MAKING YOUR BUSINESS A SUCCESS www.thebusinessadvisory.ca