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ELIAS STASSINOS, ESQ

LAW ARTICLES  Saturday, November 01, 2008

Asset Protection

You May Need Two Corporations

After you obtain a trademark and incorporate your business, you have a false sense of  security.   You think that because you incorporated your business, the corporate structure might protect you assets.    This is correct.   Your personal assets are protected.  However, incorporation does not protect your company assets.

If your corporation is subject to lawsuits, and it has significant assets, such as expensive equipment and machinery, a judgment against your company will result in all assets of the business to be seized as part of the judgment. Your company will lose machinery, equipment, or any other item of value.

The solution to this problem is to begin with two corporations.  One will hold all the assets and lease them to the other one. The corporation susceptible to lawsuits will maintain minimal assets and use the leased equipment.

If the corporation is sued, there will be minimal assets to be seized.

Elias Stassinos, Esquire   is a trademark and incorporation attorney that has helped thousands of  small business owners and entrepreneurs launch their first business enterprise.  He's also an entrepreneur who operates several successful businesses not related to his law practice.