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I have been asked to explain what & how I'm shielding my family from my business. First, as a sole propietor,I am directly responsible for any finanical losses that the business incurs. Most notable situations would be a lawsuit or a lien. In either case the lawyers for the claimants will try to show that other people (e.g., my wife) were actively involved in the business and therefore financially responsible for the losses also. (Side note: until recently, the IRS also would pursue this course of action. Now it is easier to exempt your better half from this liability.)
Some of the other shields that I employ are:
1. Seperate accounts in checking for the business
2. Never let them sign for any thing (reciepts, loans,
contracts, etc.)
3. Never let them deal with the customer (take a
message & let the owner reply)
4. Your personal property should be jointly owned.
5. Your mission statement for the business should
clearly state who is involved.
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