ASSET PROTECTION

ASSET PROTECTION is an element of most business law decisions.  Asset protection usually involves the protection of both the assets “inside” of a business entity, such as a corporation or an LLC, such as the assets of a business owned by a corporation, and assets “outside” the entity, such as assets owned directly by the owner of the business entity, such as the owner’s home.    

The creation of a business entity such an S corporation or a C corporation, a limited liability company, sometimes referred to as an LLC, a limited partnership, sometimes referred to as an LP, a limited liability partnership, sometimes referred to as an LLP, a Family LLC, a Family LP, an asset protection trust and many other entities are done primarily for asset protection.  The asset protection shields created by formation of these entities can offer some protection to both the assets “inside” the entity and the owner’s personal assets held “outside: of the entity.  

Asset protection can be classified as “Inside-Out Asset Protection” or “Outside-In Asset Protection”.  

Inside-Out Asset Protection is the protection a business owner’s personally owned assets receive from claims against a business entity such as a corporation, an LLC, an LP, a Family LLC, a Family LP, an Asset Protection Trust or any other entity that provides an asset protection shield.  Inside-Out asset protection prevents a third party creditor who sues and gets a judgment against the business entity from reaching the owner’s assets held outside of the entity.   For example, in most fact situations, a third party creditor who gets a judgment against a corporation or and LLC cannot go after the owner’s assets that are not owned by the corporation or LLC.  That is, a claim against an entity such as a corporation, cannot reach an asset “outside” the entity, such as a house held in the name of the shareholder. Corporations and LLC’s provide similar levels of “Inside-Out” Asset Protection.

Outside-In Asset Protection is the protection received by an entity’s assets from claims against an owner of the entity, such as a corporation, an LLC or another type of business entity that provides an asset protection shield.   Outside-In asset protection prevents a third party creditor who sues and gets a judgment against the owner of the business entity from getting to the assets “inside” the entity, that is, the assets owned by the entity.  In many fact situations, LLC’s can provide better “Outside-In Asset Protection” than can corporations. 

Although most business law advice involves some aspect of asset protection, any natural person who has significant assets, that is, assets valued in excess of a million dollars, should seriously consider asset protection structuring beyond the use of business entities such as corporations.

 

Please contact one of our attorneys listed below to discuss what you can do to protect your personal assets and the assets of your business from creditors. 

          Jim Gulseth

Practice Areas:

• Business Start Ups and Formations

• Business Sales, Mergers & Acquisitions

• Business Contracts & Transactions

• Business Litigation

• Incorporation & Corporate Law

• Dispute Resolution & Arbitration

• Intellectual Property & Trade Secrets

• Limited Liability Companies

• Asset Protection

JGPC Business & Corporate Law is a business law firm providing cost-effective, quality legal services to privately held businesses, business start ups, entrepreneurs, business owners, managers, executives, investors, buyers & sellers throughout the Tri-Valley and the East Bay Area, including Pleasanton, Dublin, Livermore, San Ramon, Danville, Walnut Creek, Castro Valley, Fremont, Tracy, Modesto, Manteca, Stockton and all of Alameda County and Contra Costa County. We are here to serve all of your business and corporate law needs.

CONTACT US:
Please contact us at our Pleasanton, California law office to discuss all of your business law and corporate law needs.

JGPC Business &
Corporate Law
5890 Stoneridge Dr. Suite 102
Pleasanton, CA 94588
925.463.9600 Tel
925.463.9644 Fax
jgpc@jgpc.com
www.jgpc.com