As a business owner, your business is the lifeblood of your finances and one of your biggest assets. Your assets are representative of how hard you have worked to get your business to where it is today, taking on the form of things like property and vehicles. It is important to protect these assets, especially when they are tied into your business. While it may not be readily apparent on how to protect your assets, there are certain strategies you can put in place to ensure they are taken care of. Even if you have yet to face potential dangers when it comes to protecting your assets, it is still vital to be aware of how to keep them safe and what you should avoid.
If you require expert accounting solutions, trust one of the best SME accounting firms in Brisbane by calling Taggart & Partners on (07) 3391 1188, sending an email to enquiries@taggartandpartners.com.au, or getting in touch online.
Best Tips for Protecting Your Assets
Invest in Insurance
One of the easiest and most common ways for you to protect assets is ensuring they are covered by insurance. There are a range of insurance options available, with insurance offered for your business, your home, and even yourself. Insurance typically covers you from issues such as public liability, professional indemnity, and workers’ compensation, while also ensuring your assets are covered from damage caused by natural disasters or criminal behaviour.
Establish a Discretionary Trust
When looking for how to protect your assets, establishing a trust should be one of the first options you consider, especially if you are planning to pass your business onto your children. Being the most common type of trust in Australia, a discretionary trust sees a trustee hold benefits for one or more named beneficiaries. The trustee has complete control over how the trust income and assets are distributed to the beneficiaries. They are typically used to protect the family business from creditors, ensuring the business stays in the family.
Restructure Your Business
Like a trust, changing the structure of your business is a way of protecting your assets from creditors. Once you have established your business as a company, it is treated as a separate legal entity. This means that the company itself is held responsible for any debts it incurs, keeping your personal assets safe. This strategy is not recommended if you are a sole trader or work under a partnership, as you will still be personally liable for any debts the business gains. This means creditors can legally come after your personal assets, such as your home or car.
Transfer Assets to a Low-Risk Spouse
If you are worried that your business makes your assets vulnerable due to the risk of debts or lawsuits, consider transferring your personal assets to your low-risk spouse, who may have more stable employment. An example being that your house is placed under your partner’s name, meaning it is not at risk should your business fall onto hard times. This is one of the most effective ways of how to protect your assets as it gives you peace of mind that your assets are safe even if your business experiences bankruptcy.
Need More Advice on How to Protect Your Assets?
At Taggart & Partners we understand how hard it is to run a business, which is why we specialise in supporting small and medium enterprises reach their full potential. Whether you need help with asset protection or with planning an exit strategy for small business, our accounting specialists are always available to help you grow both your business and your personal wealth. To get started, please give us a call on (07) 3391 1188, send an email to enquiries@taggartandpartners.com.au, or get in touch online.