"The future belongs to those who prepare for it." Ralph Waldo Emerson Is your business incorporated? If not, do so immediately. Call your lawyer or your accountant and ask that they file incorporation papers ASAP! Why? Because in this age of frivolous lawsuits by shady characters looking for easy money, you may be putting all you have in harms way. Sure, when you stated your business and your assets were less than lunch money, you did not have the bucks to incorporate and who cared, as you had nothing for anyone to sue you for. But that was then, now it is time for change. Otherwise, a problem with a creditor or a sleaze bag suing you, can screw up your personal financial life. Don't take chances, be sure your business is a corporation-not a proprietorship or partnership. For without a corporate shield, your personal bucks are tempting nuggets for creditors and scoundrels. Why work and sacrifice to build your pile of personal assets only to risk it all out of ignorance? Converting your business to a corporation will help you protect the pile of cash you are saving for your old age. If your business is incorporated and a creditor presses legal action to collect an unpaid bill, he or she cannot attach your personal assets. You have been prudent -you have protected your family jewels by a legal corporate shield. But do it before getting into trouble or your new corporation will not protect you. A corporation is based on the concept of limited liability. A legal maneuver developed during the rise of the industrial age in England to protect investors and encourage business investment. It means that you are risking only the money you are investing. The creditors can go after the assets of the corporation, but not the owner’s personal property. The owner’s liability is limited to their investment. If your business is a corporation you are protecting your home, personal bank accounts and any personal property you own. But watch out, the IRS can puncture your legal shield, and so can creditors if you signed any personal guarantees pledging your personal assets to satisfy the debt of your corporation. Here is a simple definition of a corporation- it is a legal entity that can own property, sell property, buy property, it can sue and it can be sued. It is immortal until bankrupt or liquidated. It is a straight forward and simple task in most States to incorporate a new business. You are required to file an incorporation application with your State’s Secretary of State, indicating the name of your corporation, the number of shares you wish to issue, and the corporate officers. However, I suggest you keep you life simple and have your attorney handle the process. After you get your States sanction allowing you to incorporate and use the business name you have selected, you ( or your attorney) will order the corporate seal, stock certificates and file with the IRS for a tax ID number (similar to a Social Security number). When all is in order, issue your stock certifcates, take the corporate seal, and your tax ID number to your bank, to open your corporation’s checking account. If you are about to incorporate your present business the process is the same but with the additional tasks of transferring the assets and liabilities from your personal ownership and responsibility to your new corporation- don’t attempt this without help from your attorney or accountant. If you are thinking of selling your business, it can be a simple matter if it is incorporated. You sign over your shares or stock certificates to the new owner- your business assets and bills go with the shares. Otherwise separating the business from your personal assets can be complicated and time consuming. Copyright 2003 Paul E. Adams Dr Paul E Adams, Professor Emeritus Business, Ramapo College of New Jersey & Retired Entrepreneur, Syndicated Columnist, Host of the access cable TV program "Tri -State Movers and Shakers," and Author of “Fail-Proof Your Business,” Available @ Amazon Dot Com. Comments, questions, or suggestions to: xpaul@pikeonline.net