Legal Lifesavers

Legal Lifesaver
- definition -
"a concise piece of legal information that might save your assets."

 

Murray Gottheil heads up Pallett Valo LLP's Business Law Practice and Family Business Law Group.

Bio.

www.pallettvalo.com




Business Law Summit
September 22, 2010
Getting to Sold: Preparing your Business for Sale to Maximize your Return
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Labour & Employment Law Seminar
October 13, 2010
Terminations: Avoiding Legal Landmines
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Creditor Protection Strategy

Just about every business person understands the importance of having a tax strategy and an investment strategy. However, relatively few business people insist on having a creditor protection strategy. The best tax strategy and investment strategy in the world won’t help much if you lose all of the money unnecessarily because you did not have a creditor protection strategy.

Here are some things to think about:

  1. If you are going to act like a banker and lend money to your own company, you might as well act like a smart banker and take security for your loans.
  2. Directors and officers of corporations have personal liability. Why expose more family members than necessary to this liability?
  3. Keeping retained earnings in your operating company is like carrying your good china in your pocket while you are skiing. Even if you are a great skier, why take the risk, especially when the retained earnings can be moved to a holding company tax-free?
  4. An operating company is almost never the right place to hold real estate.
  5. Does it make sense for a husband and wife to hold title to their house jointly if one of them in unlikely to ever be sued and the other is a director and officer of a company and may have personally guaranteed business obligations?
  6. It may make sense to operate different businesses in different corporations. 

 

Murray Gottheil
Pallett Valo LLP

 

 

 

 

 

 

 

Photo by Maureen T. McKay