If you own any assets, you need asset protection. Protecting your assets is as important as acquiring them in the first place. If you do not protect your assets, all the hard work you put in to be able to obtain them can be quickly undone. When you have a legal and effective asset protection strategy in place, you can effectively prevent a claim against your hard-earned assets by, among others; a creditor, a person who wants to challenge your estate after your passing, or a partner in the event that a relationship breaks down in the future. People assume that asset protection is only for wealthy people, but the reality is that, as long as you have anything of value, you can benefit from asset protection. There is a range of assets that need protection. Read on to learn what types of assets you should protect, why you need asset protection, and ways of protecting those assets. What Assets Need Protection? There are many assets that need protection. They include the following; Homes Bank accounts Personal property Business property and premises Business contents, such as equipment and stock Real estate property Goods in transit Intellectual property Cash and credit Vehicles, including commercial vehicles Boats Planes Inheritances Generally, asset protection is about protecting your business and personal assets. Why Do You Need Asset Protection? As already mentioned, you need asset protection for various reasons, such as to prevent creditors, a partner, or someone else from making a claim on your assets. If, for example, a creditor files a lawsuit against you to recover the money you owe them, you face the risk of losing assets such as your home, car, and money. Furthermore, if you are caught up in a lawsuit, it means you need to spend money on legal fees. How Can You Protect Your Assets? There are many ways to protect your assets. The following is a look at some of the ways you can consider; Limited Liability Companies (LLCs) An LLC can offer you the opportunity to protect your personal assets from business creditors. However, an LLC cannot protect your business assets from business creditors. Offshore Trusts An offshore trust is an estate planning tool that grants a person legal jurisdiction outside of the United States of America. Putting up an offshore trust involves creating a trust in another country. Once an offshore trust is created, it protects assets from domestic creditors. Insurance Policies Liability insurance policies can also help you protect your assets. The following insurance policies can help you secure your assets; Umbrella policies Life insurance policies Malpractice policies A life insurance policy, for example, can help you protect your assets from seizure by a creditor who has obtained a court judgment against you. Prenuptial Agreements Lastly, a prenuptial agreement, which is an agreement that couples sign before marriage, can help you protect the assets you have before marriage. A prenuptial agreement can even help you protect future assets that you specify will be considered yours in the event of a divorce. Contact Bagla Law Firm for Legal Help If you want to know more about the assets, you should protect and how you can protect those assets, do not hesitate to contact the experienced and dedicated San Diego asset protection lawyer at Bagla Law Firm. We can help you develop an asset protection strategy best suited for your assets. You can call 760-579-6789 or fill out our online contact form to schedule a consultation.

Business owners of all types need to familiarize themselves with the concept of incorporating.  No matter what kind of business you undertake or the service you provide, there are several significant benefits to becoming a corporation.  Let’s look at some of the important things to know about setting up a corporation. Exactly What is a Corporation A corporation is a business structure.  When the owners of a company incorporate, they are establishing their business as a separate legal entity.  The act of incorporation gives the owner significant personal legal protection.  This is because once incorporated, a company enjoys the distinction of “corporate personhood.”  The corporation is the entity that subsequently enters into contracts, borrows money, and goes to court.  As such, the owners cannot be personally held liable for the corporation’s liabilities and debts. Business Structure of Corporations There is a two-level structure to most corporations: Ownership level: shareholders are the owners of the corporation, whether private or public. Active management level: the shareholders usually elect a board of directors, who in turn are responsible for the selection of corporate officers, which would include titles such as: Chief Executive Officer (CEO) Chief Financial Officer (CFO) Etc. In smaller corporations, shareholders often take on the roles of corporate officers; this is usually not the case with larger corporations. The Two Most Common Types of Corporation Although there are several types of corporation designations, by far the two most common are: C Corporation: this is the most basic form of corporation.  C corporations can have an unlimited number of shareholders, and shares can be traded publicly, although this is not mandatory.  They can also be privately held, with the shareholders being the owners. S Corporation: rather than a business structure, an S Corp is a form of tax status.  The main advantage is that the owners can pass through the income the business generates onto their personal tax return.  This allows them to avoid double taxation, a significant benefit. Other Types of Business Entities Apart from C Corporations and S Corporations, there are other entity types that may apply to certain types of businesses.  These include: Professional corporation Limited liability company Non-profit corporation Public benefit corporation A lawyer will tell you if any of these types of entities apply in your specific situation and the advantages of being set up in a particular way. Benefits of Incorporating Your Business Probably the single greatest benefit to forming a corporation is that it limits your personal liability.  Having the distinction of corporate personhood means that in the event of any issues down the road, the shareholders are not personally liable for any debts (their personal assets cannot be seized, for example). There are also potentially significant tax advantages to incorporating your company.  The aforementioned pass-through taxation feature for S corporations is just one of them.  There are also tax deductions available to corporations that do not apply to business entities such as sole proprietorships and partnerships. We’d be happy to answer any questions you may have about forming a corporation. Contact our team to learn more.

A non-profit corporation is a type of business entity.  In contrast to other kinds of corporations, nonprofits exist for the benefit of some collective, social, or public benefit rather than to generate a profit for the owners.  To put it another way, they carry out a non-commercial purpose.  Any revenues generated by a nonprofit have to be committed to the organization’s purpose, as opposed to being paid out to anyone else. Who Owns a Non-Profit Corporation: No One This is an important distinction over all the other business entities out there, including sole proprietorships, general partnerships, for-profit corporations, and limited liability companies. None of these structures apply to non-profit corporations.  In a non-profit, there are no owners; there are no shareholders. The Purposes Non-Profit Corporations Typically Serve We’ve mentioned the idea of a non-commercial purpose.  Here are some of the specific purposes that would qualify for a non-profit corporate structure: Charitable Scientific Educational Religious Social Club Political Although it is possible to operate a non-profit entity without creating a corporation – as an unincorporated association – in most situations, lawyers would advise against it. As mentioned, non-profit corporations are forbidden from operating in such a way that individuals receive private inurement – or profit – from it. Granting Non-Profit Status and Tax-Exempt Status The Granting of non-profit status to a corporation is typically a state responsibility, although the federal government can also grant it.  Acquiring tax-exempt status is done through the federal government.  To be income tax-exempt in the United States, there are requirements in the Internal Revenue Code (IRC) that have to be met.  The process is overseen by the Internal Revenue Service (IRS). It is important to note that not all non-profit corporations are granted tax-exempt status.  Lawyers are often consulted to assist with the process. Potential Issues with Non-Profit Corporations Despite their best intentions, non-profits have their share of issues: Mismanagement of resources – this is a problem non-profits are particularly susceptible to, due to the fact that, in fact, there is no “owner” an employee is accountable to.  An employee, for example, could start some new program or initiative without a full recording of transactions and liabilities could result in accounting fraud. Founder’s Syndrome – as the organization evolves and expands over time, it may, through the actions and initiatives of volunteers or new employees, start to deviate from the original vision as set out by the founders.  This can lead to conflict and a struggle among the various parties over direction and control. Help Getting Started with a Non-Profit Corporation It is widely acknowledged that starting a non-profit can be complicated and difficult.  There are multiple hoops to jump through, red tape to cut, governmental levels to work with, and all the legalities that go with them.  One essential word of advice is to enlist the services of a good corporate lawyer, who can advise and assist you along the way. We’d be happy to answer any questions you may have pertaining to non-profit corporations.  Contact our team to learn more today.

As an owner of a small business avoiding the danger of litigation should be a top priority for you. Legal issues can take you by surprise and seriously hurt your bottom line. To help protect your business, watch for these common legal issues:

By Kelly Bagla, Esq. Thinking about starting a business?  If you are – Brilliant!  Congratulations on taking control of your life and being part of the 31.7 million small businesses in the USA.  Before jumping in with both feet, it’s important to research your industry, find competitors, understand risk and map out your finances before starting your business. Starting a business can be stressful, but having the independence of being able to provide for your family is beyond security.  Starting a business does come with work, often feeling like there are a thousand things to work on all at the same time.  There’s no avoiding this reality for new small business owners, but with planning, it’s possible to manage expectations and take actions with a sense of purpose toward building your business. Many people who have started businesses usually take these steps: DO YOUR RESEARCH.  You should understand the industry you’ll be involved in so you can dominate it.  No matter how unique you might think your business idea is, you should be aware of what your competitors are doing.  What’s worked for them and what’s not so you can avoid their mistakes. DETERMINE YOUR AUDIENCE.  Spend time considering who your target demographic will be.  This audience will be the driving force in each decision you make.  Understanding who needs your product or service can help fine tune your offerings and ensure your marketing and sales strategies are reaching the right people.  Part of this decision us understanding if you are a business-to-consumer (B2C) or business-to-business (B2B) enterprise.  Within those parameters are multiple categories, including but certainly not limited to age, gender, income and profession.  You cannot earn a profit without your customers, so understand who they are and make them your priority. HAVE A STRONG MISSION.  Standing out is no easy task and no one magic formula guarantees results.  However, knowing your business’s purpose is central to guiding these decisions.   By spending time on what’s important to you, what your business’s strengths will be, what differences you want to bring to your target market, and what purpose will those differences serve, you can create a strong mission statement that will reflect your business beliefs.  Staying true to yourself will show your audience that your business will be consistent and your customers can rely on you for the same professional quality of goods and service.  It’s only appropriate to mention that one of my favorite quotes is “Why Blend In When You Were Born To Stand Out.” MAP YOUR FINANCES.  Starting a business requires money that you likely won’t have right away.  This is why you need to seek out ways to acquire capital.  Most entrepreneurs start a business with a very limited amount of capital.  However, there are plenty of options available to an inspiring business owner.  The first and most common place to seek capital is from friends and family.  If that is not enough, expand the search to angel investors and then venture capitalists.  Should these options not provide the amount needed, then apply for business loans through banks and small business associations (SBA). UNDERSTAND THE RISK.  Of course, there will always be a level of risk involved with launching a new business venture, but calculating, understanding, and planning for risk is an important step to take before you start working on your business.  This means assessing your industry’s risks before moving forward with a business plan.  Risks can come in many forms, as mentioned, industry risks, financial risks, loss of customer interest, and most importantly, being sued and loosing everything.  Planning and preparing as much as you can for business related risks could save your business from going under and save you thousands in hard earned money. HAVE A BUSINESS PLAN.  Business plans come in many forms, for example, business plans to raise money, business plans to expand operations, and business plans to start a business.  The latter one is the type of business plan you want to start with.  Keep in mind a business plan is a live document that will change when your business needs change or expand.  It can be tedious drafting a business plan but its essential to keep your business on track.  Start the business plan by first outlining the steps you need to take for a successful launch and continued growth.  Include the following: your mission statement, a description of your business, a list of your products or services, an analysis of the current market and opportunity, a list of decision makers in the company, along with their bios, and finally your financial plan outlining how and when the money will be used. Becoming a business owner, you control your own destiny, choose the people you work with, reap big rewards, challenge yourself, give back to the community, and you get to follow your passion.  Knowing what you’re getting into is smart business because the responsibility of protecting your family and yourself falls on you. For more information on how to legally start and grow your business please visit my website at www.BaglaLaw.com Disclaimer:  This information is made available by Bagla Law Firm, APC for educational purposes only as well as to give you general information and a general understanding of the law, and not to provide specific legal advice. This information should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.

By Kelly Bagla, Esq. Did you know out of the 27.9 million businesses in the United States, 2.45 million of them are owned by Veterans? 70% of American consumers are more likely to buy from a veteran owned business than from a business not owned by a veteran.  Starting or running a business takes courage, discipline and dedication.  It also takes knowing the legal aspects that could safe guard your hard work. Before starting, running or buying a business consider the following: HAVE A BUSINESS PLAN.  A complete, thoughtful business plan is one of the most valuable tools in helping you reach your long-term goals.  It gives your business direction, defines your objectives, maps out strategies to achieve your goals and helps you to manage possible bumps in the road. OBTAIN FINANCING.  Whether you are starting a new business or buying an existing one, small businesses need money.  If you or your spouse served in the military and would like to fund your small business, you can take advantage of a few different favorable loan options geared towards veterans. INCORPORATE YOUR BUSINESS.  Many small business owners launch their companies as sole proprietorships in which they and their businesses are essentially one and the same.  However, changing the format of a small business to a corporation or a limited liability company can offer a range of advantages for entrepreneurs.  The advantages of incorporating a small business include: Personal asset protection. Both corporations and limited liability companies allow owners to separate and protect their personal assets. Additional credibility and name protection. Adding “Inc.” or “LLC” after your business name can add instant legitimacy and authority.  Consumers, vendors and partners frequently prefer to do business with an incorporated company. Perpetual existence. Corporations and limited liability companies can continue to exist even if ownership or management changes.  Sole proprietorships and partnerships just end if an owner dies or leave the business. Deductible expenses. Both corporations and limited liability companies may deduct normal business expenses, including salaries. Compete for more contracts. Some businesses require vendors and contracting companies to be incorporated before they can compete for contracts. Entice and hold employees with stock options. A corporation has an advantage in attracting talented employees by offering employees partial ownership in the business through stock options. Becoming a business owner, you control your own destiny, choose the people you work with, reap big rewards, challenge yourself, give back to the community, and you get to follow your passion.  Knowing what you’re getting into is smart business because the responsibility of protecting your family and yourself falls on you. For more information on how to legally start and grow your business please visit my website at www.BaglaLaw.com Disclaimer:  This information is made available by Bagla Law Firm, APC for educational purposes only as well as to give you general information and a general understanding of the law, and not to provide specific legal advice. This information should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.