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Apr 28, 2009 
Corporations are a type of limited liability business that is intended by law to create a new entity that is separate from the owners of the corporation.
Personal Assets are any wealth that you have accumulated—home, real estate, bank accounts, retirement accounts, gold in vault, etc. If these assets were earned in the course of a business you own, they become personal assets when they are properly disbursed from the business in the form of salaries, bonuses, or owner profit distributions.
The corporation has assets as well—bank accounts, real estate, office and factory equipment and supplies, vehicles, accounts receivable, etc.
The corporation also has liabilities—accounts payable, loans outstanding, etc. The value of the corporation at any time is the assets minus the liabilities. In most small businesses, the company assets are not allowed to get any larger than what is needed to operate the business and any excess money is distributed to the owners.
The corporation is designed so that if the business “harms” someone (financially, physically, etc) and sues the corporation, only the assets of the business may be seized to pay the lawsuit. They cannot get through the “Corporate Veil” to get to the personal assets of the owners.
This veil is maintained as long as the owners keep good corporate records to show that the business is acting properly and as a separate entity from the owners, and there is no fraud involved.
Unfortunately, 95% plus of all small corporations- one and two person businesses—don’t keep these records and that is why I wrote the program Cover Your Assets! It can help small corporation owners to quickly and easily figure out how to get this corporate veil working for them and get their records straight, so that their personal assets are protected.
Consider this a wake-up call, if you wait till you are sued or audited to address this, it is too late.
Seize the Day.
Rob
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• Apr 28, 2009 @11:20 am
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