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Asset Protection For Your Small Business

Next to turning a profit, protecting assets is among a small business’s most important objectives. Securing the long-term success of your company depends on it, and the services of an experienced business and corporate law attorney can help. But what are your company’s assets? And how can you safeguard them?

Asset protection means avoiding unnecessary risks that create losses and liabilities. Debts, lawsuits, and damages – among other threats – can devalue or even destroy your company’s most profitable assets. Consider a few examples of common assets and how they can be protected:

  • Real estate and other physical assets. If your business has a physical presence, it likely has land, buildings, and vehicles. Premises liability is a constant concern for businesses that regularly interact with customers and clients out of brick-and-mortar locations. Having the right insurance and repairing any obvious defects to the property can prevent visitors from suing you and winning substantial damages. The same is true for any vehicles your business owns or leases.
  • While insurance can protect your small business property, the right legal organization can ensure that any litigant cannot reach your personal assets. You may wish to organize as a corporation, limited liability company, or partnership, depending on your liability, tax, and management concerns.
  • Employee assets. If you’ve spent considerable time and effort training your top talent, then you need to view them as assets to your business. You can take steps to limit the ability of these investments to later do harm to your company. For example, a non-compete agreement can limit an employee’s ability to leave your business and work for a competitor. Non-solicitation agreements keep workers from departing your company and poaching your customers. Finally, non-disclosure agreements protect employees from stealing confidential information and selling or giving them to a competitor.
  • But you should also consider the use of employment contracts to lessen the likelihood that your employees will file their own claims against you. Employment contracts can cover a broad range of employee matters, from pay and bonuses to performance reviews and causes to terminate. They help ensure that both parties understand the employment relationship and their respective rights and obligations.
  • Intellectual property assets. Trademarks, service marks, copyrights, trade secrets, and patents are all forms of intellectual property. There’s a good chance your company regularly uses at least one of these in the course of conducting business. Even if you’ve developed a logo, you need to protect it from unauthorized use, which could dilute your brand and damage your reputation. Ask an attorney about the types of intellectual assets your company may own and how to secure them.
  • A business law attorney can further assist in protecting your business and its assets by conducting risk mitigation. This is a process by which an experienced business lawyer will review your company from the inside out to identify and correct possible risks. For example, does your business have a recall strategy in the event a product you make causes injury to consumers? Have you recently updated your policies and procedures to account for changes to employment, wage and labor, and anti-discrimination laws? All of these are ongoing threats to every small business.

In the event your company is sued, certain assets may face liability exposure. But all is not lost. An attorney can help favorably settle the lawsuit by employing alternative dispute resolution (ADR) methods such as mediation. If necessary, your lawyer can defend your interests in court.

The best way to begin protecting your small business assets is to retain a knowledgeable business attorney early on who can prepare you and mitigate unnecessary risks.