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Habit # 7- Entrepreneurs Protect Their Assets
 
   
   
  Successful people protect themselves legally. They separate their personal assets from their business assets by incorporating. There are several types of cooperation, but we will cover two: Sole Proprietor and "C" Corporation.
   
 
  • A Sole Proprietor is the owner of the business. Therefore, if the business is faced with a litigation, the business owner bears the burden of the business. Everything is attached to the owner's name and his/her social security number...this is too risky.
  • A Corporation gives the owner (share holders) limited liability to their investment. In other words, if you invest $10,000 in a company and that company was sued, you would only lose your investment, not your house.

 

 

Also, incorporating allows you to operate your business on pretax dolls. What are pretax dollars? Simply, it is for the purpose of running your business and is not taxable. See your accountant for your specific business.

You can get incorporated by a paralegal, notary, attorney, or you could do it yourself. We encourage you to have a legal representative of the courts do it for you.

In closing, entrepreneur own nothing, they control everything.

   
   
 
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