The concept of and strategies for guarding one’s wealth. Asset protection is a type of planning intended to protect one’s assets from creditor claims. Individuals and business entities use asset protection techniques to limit creditor’s access to certain valuable assets, while operating within the bounds of debtor-creditor law.
Asset protection helps insulate assets in a legal manner- without engaging in the illegal practices of concealment (hiding of the assets), contempt, fraudulent transfer (as defined in the 1984 Uniform fraudulent Transfer Act), tax evasion or bankruptcy fraud. Experts advise that effective asset protection begins before a claim or liability occurs, since it is usually too late to initiate any worthwhile protection after the fact. Some common methods for asset protection include asset protection trusts, accounts- receivable financing and family limited partnerships.
Our team of experts are also going to help in other areas in which your assets might be at risk. Some of these are malpractice suits, divorce, creditors or employee law suits.
LLC vs Corporation
Below we have listed some of the main questions people have about company structures and general answers in a side-by-side format. If you’re wondering the differences between an LLC versus Corporation, this may help you decide what entity is best for you. We also offer aged corporations.
Mergers and Acquisitions:
Mergers and Acquisitions (M & A) are transactions in which the ownership of companies, other business organizations or their operating units are transferred or combined. As an aspect of strategic management, M & A can allow enterprises to grow, shrink, change the nature of their business or improve their competitive position.
From a legal point of view, a merger is a legal consolidation of two entities into one entity, whereas an acquisition occurs when one entity takes ownership of another entity’s stock, equity interests or assets. From a commercial and economic point of view, both types of transactions generally result in the consolidation of assets and liabilities under one entity, and the distinction between a “merger” and an “acquisition” is less clear. A transaction legally structured as a merger may have the effect of placing one party’s business under the indirect ownership of the other party’s shareholders, while a transaction legally structured as an acquisition may give each party’s shareholders partial ownership and control of the combined enterprise.
Succession Planning aims to ensure that when you retire or die, not only will your business continue according to your vision, but your heirs won’t be saddled with a huge tax bill for carrying out your plans.
There are several reasons to have a succession plan in place. First and foremost, a family business in particular needs to make sure they have some kind of succession plan. A succession plan for a family business should address the following questions: do you want your children to take over the business? Some children but not others? Are your children able to take over the business? Or should they just own it and someone else manage? If you die, will your spouse get control of the business? If you sell your business outright to your children, will you pay capital gains?
Another important reason to create a succession plan is tax savings. If you die without some kind of plan in place, estate taxes start at 37 percent and ratchet up to a whopping 55 percent fairly quickly. The government gives heirs only nine months to pay this tax, The first thing to do in preparation for succession is to decide who gets the business next. Keep in mind that there’s a big difference between who runs the company and who owns the company; be realistic in your choice. If your kids don’t want anything to do with the business, don’t force them. An uncooperative heir can scuttle the whole plan after you’re gone.
The Ultimate goal of the Exit Planning Process:
Business owner exit planning is a complex process. The ultimate goal is to ensure that owners leave their business when they want to, with the cash they need and with the lowest possible tax implications.
The Steps of the Exit Planning Process
According to the Business Enterprise Institute, the exit planning process has many steps. We provide guidance beginning with the first step that requires the business owner to define the exit objectives to the final step in which the owner has a final personal estate and wealth planning strategy in place. These steps are designed to comprehensively address all of the concerns and issues that will arise during the exit of a privately owned business.
Business Evaluation is a defined process used to estimate the economic value of an owner’s interest in a business. Evaluation is used by financial market participants to determine the price they are willing to pay or receive to effect the sale of a business.
Each business evaluation engagement we undertake is different but there are some similarities as well. In nearly every engagement we run several evaluation models using the following approaches:
Market Approach: using comparable companies as a benchmark, we develop relevant statistics to compare your company and develop a value.
Income Approach: We use the income approach to build a risk profile of the specific company. We then apply that risk rate (“discount rate”) to the subject company often using a discounted cash flow or capitalization of earnings model.
Asset Approach: The asset approach uses both the “hard assets” and intangibles of the company to understand value.
1031 Exchange-Real Estate transaction
The 1031 exchange allows investors to defer capital gains taxes on any exchange of like-kind properties for business or investment purposes.