Protecting Personal Assets with Incorporation

April 18, 2009 by admin
Filed under starting oregon business

When you decide to start a business you really need to go at this the smart way. A very high percentage of new Oregon businesses start and then “stop”. New businesses fail everyday. You don’t want your new business to fall into this category. Right?

A very big problem with new businesses is that they are afraid to take the step of incorporation. Why is that? Incorporation is seen as serious. Incorporation is seen as more responsibility. Incorporation is a legal process that many are afraid to make mistakes about.

These are all common views of incorporation among the unincorporated public. Naturally we fear it.

“There is something you should fear more – losing all your assets if you don’t incorporate.”

Incorporating your new Oregon business creates a separate legal entity – in the eyes of the IRS and the justice system. The company you create is not you, it’s separate from you. It has a federal ID number like you have a social security number. It has separate taxes. It is separate from you if your business is sued in legal action.

Before you incorporate your personal assets are wide open. A court can judge against you and take your personal savings, home, cars, boat, electronics – whatever they choose really. The courts are not kind, they can’t be – they’re fair though.

What’s fair is fair… if you haven’t incorporated, your personal assets are all at risk.

Much better to incorporate your Oregon business as soon as possible and protect your assets from legal action against your business. Keep in mind that there are many things you could do once incorporated that can cause the court to “Pierce the corporate veil” and still take your personal assets – but, you’d have to screw up pretty bad to get to that point. Read up on how to act as a business owner. Intent to commit fraud and other things are good reasons for the court to grab your personal assets anyway.