Today’s Financial Planning Tip for Businesses
Becoming more financially responsible is a lesson you had to learn in running a household. As a new business owner, it’s one you may find yourself learning all over again. Many of the same principles apply for both personal life and business. But financial planning is more complex for your company. For example, standard homeowner’s insurance provides some protection if a person gets hurt at your house. But people can sue your business for many different types of harm – not just slip and fall accidents on your company’s property. Let’s say a contaminated or unsafe material accidentally makes it into your supply chain. Or, perhaps your company hits rocky financial waters due to another deep economic downturn. Your personal assets could be seized to pay for company debts or to settle litigation claims.
It might be wise to consider creating a limited liability company to protect your assets such as savings and retirement accounts from being at risk in the event of a lawsuit. You can also enjoy a number of tax benefits that C corporations don’t enjoy. You don’t have to have a business partner to form a limited liability company. In most states, you can form an LLC even if you are the sole owner of a business.Tags: business, financesBusiness, Finance