What happens when your small business gets personal?

 In Small Business Legal Help

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When you run a small business, it can be hard to keep separate business from your personal assets at the end of the day. Many small business owners work seven days a week, so this is understandable. However, when it comes to mixing your personal ASSETS and your business, there are good reasons you’ll want to be extra careful.

Risk of lawsuits

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If you don’t separate your business assets from your personal ones, you run the risk of losing the latter in a lawsuit. But there are several ways to minimize that risk. These include:

  • Properly capitalizing and insuring the business
  • Complying with entity formalities
  • Properly filing the company’s Articles of Organization or Incorporation
  • Creating Bylaws or Operating Agreements
  • Separating bank accounts for the business so they don’t mix with personal funds
  • Documenting reasons for your financial situation
  • Documenting money transfers between you and the company
  • Keeping business debt in check compared to equity

Contact Dana Ball Legal Services today

We want to give you practical advice that you can use right away in your day-to-day operations to avoid a full-blown lawsuit. Get in touch with us for more details on exactly how. You can also subscribe for weekly broadcasts on keeping your business out of court.

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