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LLCs and Asset Protection About a decade ago, we experienced one of the most difficult economic periods since the early part of the 20th century. Through that experience, many individuals and businesses suffered such great losses that many of them have still not fully recovered. A lot of these businesses ended up having to close down for good, while countless individuals and families lost their homes, properties, and other vital assets. Since that time, the economy has been brought back to a positive state, and many of us who survived that experience have been able to learn a great deal about how to stay protected from any potential future economic harm. Coming out of that rough period, many people have learned the great importance of having measures in place to protect their assets from being taken away. Surprisingly, until then, there were many people who were not very clear on the distinction between assets and liabilities. Even when someone did grasp the concept of homes and properties being assets, they still might not know that other things like cars are considered liabilities because their values are generally lost over time. With a firmer grasp of what assets really are, many of us have been able to learn more about what steps we can take to both protect the assets we currently have, as well as increase the numbers of assets we have. Of the various strategies that people can use to protect assets, the method of forming a limited liability company, or LLC, is one that has gained a lot of popularity recently. Our steadily advancing technologies, along with the rapid expansion of global online markets, has inspired many people to start their own businesses. Especially since a great majority of these are small businesses, if not essentially sole proprietorships, they have learned that forming their businesses as LLCs is one of the best ways to protect their personal assets if anything ever goes wrong. If they do not have the protection of the LLC, it is then possible for them to lose both their personal and their business assets if someone were to file and win a lawsuit against them.
Finding Similarities Between Options and Life
When you form your business as an LLC, you are afforded some of the same benefits and protections as corporations, but without as much bureaucracy and as many personal risks. Again, the key factor here is that a standard corporation can be handed a judgment in a lawsuit which could then place your personal assets at risk of being taken away. An LLC, on the other hand, provides greater assurance that your personal and business assets are not counted together. In this, even if your business assets happen to be taken away, your personal assets should then still be protected.
Finding Similarities Between Options and Life
This is actually a fairly advantageous moment in time for anyone that has enough discipline and will to form their own business. Learning from the past, by taking steps like forming the business as an LLC, people are less likely to repeat the financial mistakes that led to our previous economic struggles.