LLC and Asset Protection
Dec. 1, 2013
America is most undoubtedly the most litigious society in the world today with millions of lawsuits filed in courts throughout the nation each year. Many small business owners are concerned that they may be hit by a frivolous lawsuit and wonder how they can protect their assets from these unjustified lawsuits. Unfortunately for all business owners, a person can bring a frivolous suit for any reason and it is up to the business owner to prove the claim is false.
One of the easiest ways to protect your assets from being taken away by an unfounded lawsuit is to create an LLC, a Limited Liability Company. An LLC is a form of business that offers many advantages over other types of business organizations. The owners of an LLC are protected from liability caused by the LLC’s activities as long as the member is not personally liable. Another advantage of an LLC is that there are no annual filing dues and the administrative procedures are quite flexible when compared to that of other business forms.
When you form an LLC, your attorney prepares the necessary documents and then files the business with the state. Once this takes place, all your assets are then transferred into the LLC in return for a membership interest in the LLC. You no longer own the asset; instead the assets are now owned by the LLC.
In an LLC, the most important business document is the operating agreement, an agreement that gives the LLC the asset protection a business owner is seeking. However, to fully protect your assets, it is essential that the operating agreement is drafted properly.
An experienced corporate and business law attorney can not only draft your LLC documents properly, but can also offer advice on other issues relating to the organization and protection of your business interests in the state of Connecticut and handle any business disputes you may have, as well.