Tuesday, March 4, 2014
Should You Transfer Property to an LLC or Corporation for Protection and add Business Insurance?
Many property owners own their property under a trust, but most property is owned just as an individuals. You may need an attorney to address this issue thoroughly as an LLC or Inc. can protect you but the corporate vale can be pierced depending on how you operate your small business. There are a number of reasons to transfer your real estate into an LLC or corporation, primarily for your personal economic protection. You will not want you personal assets exposed due to an investment. For a number of reasons, you may choose to transfer real estate or other property into an LLC. An LLC or corporation alone may be enough protection, but they are no full proof. A corporation can also be looked at differently for tax reasons, so a simple LLC maybe a better vehicle for the small business or family land owner. Owning and operating a small business adds a lot of responsibility and accountability. Although you may operate with the utmost care and provide the best quality and services, a client or customer may perceive you did them wrong. This is where liability insurance can come in handy. Who Needs Business Liability Insurance? According to sources almost 8 out of 10 small businesses are a sole proprietorship or a partnership. This can make you personally liability. Additionally there is a misconception that an LLC or Corporation has protection,, but you can be personally liable if you guarantee a loan, personally injured someone even by negligence, acted irresponsibly, or illegally. Added protection would be Business Liability insurance. An LLC’s vale can be pierced if you don’t separate the use of your bank account. You can’t use the LLC funds as a personal piggy bank. Business liability insurance can protect your small business in the event of a lawsuit for personal injury or property damages. It usually covers the damages from a lawsuit along with the legal costs. Depending on your business needs, liability insurance can be purchased in many forms. The main type of insurance you would need is Commercial General Liability policy or General Insurance. This insurance can protect you from injury claims, property damage and possible advertising claims if in error. So a combination of an LLC and liability insurance will give you added protection and piece of mind. You can talk to your accountant or attorney for the best advise.