Smart Small Business Owners Defense – Part One: Protect Your Personal Assets

FIRST LINE OF DEFENSE — CREATE A LIMITED LIABILITY COMPANYSmall Business Owners need a good defense just like a football team

Many small business owners often form LLCs to limit the liability of their personal assets should their business be sued. Just like a football team, small business owners have to have a good defense to make it to the playoffs. Without an LLC, some of the assets that can be seized if you lose in a lawsuit are your:

  • Home, if it has more equity than is covered by your Homestead Exemption.
  • Wages, other income and contract payments
  • Savings and investments
  • Vehicles and other personal property
  • Vacation or rental property

Washington state law provides exemptions for $125,000 in equity in your home, personal property exemptions, IRAs, pensions and disability benefits. If a small business owner  properly maintains the LLC, only the business assets can become liable. As a Spokane Small Business Attorney, I can help you easily create an LLC.

SECOND LINE OF DEFENSE FOR SMALL BUSINESS OWNERS —

A GOOD INSURANCE POLICY

Along with creating a LLC, a good insurance policy that covers the full amount of your business assets may save your company. It’s always wise to check your insurance policies to ensure they cover the likely amounts of personal injury and wrongful death awards. The cost of insurance policies rise with the dollar amount they cover, the deductible that must be paid if a claim is filed, and the types of claims they cover. Since insurance policies may not completely protect you from such anticipated claims, owning a business through an LLC can be a way to further protect your personal assets.

EASE OF FORMING A LIMITED LIABILITY COMPANY

Many small business owners who own two or more businesses create a separate LLC for each business. This prevents a lawsuit brought against one of the businesses from putting the other businesses in jeopardy.

An LLC can be simple to form and maintained with a few documents. As a Spokane small business lawyer, I can help you quickly form get the LLC up and running. An LLC must have its own bank account, keep records of annual meetings and major decisions, adopt an Operating Agreement and be renewed with a simple annual registration that can be done on line. Annual registration fees are around $50.

For small business owners reading this blog we are offering a special flat rate of $500 for the months of October and November. Just mention our blog when you call. This includes:

Articles of Formation

  • Operating Agreement
  • First Annual Report
  • Minutes of Organizational Meeting
  • Federal Tax Identification Number
  • Annual Minutes Template

An additional one time filing fee of $200 is required to be paid to the State of Washington.

Contact me, Steven Schneider, today to see if an LLC is right for you. My contact information is (509) 838-4458 or SS@StevenSchneiderLaw.com. My Spokane business law practice is located at 203 N Washington St., Ste 204 in Spokane, WA. I’m licensed to practice in the State of Washington and Idaho.