Female-owned businesses are one of the fastest growing sectors of the U.S. economy, with the number of women-owned businesses doubling over the past 17 years, according to a recent Forbes article.
Many women who run their own companies often do double-duty as CEOs of their families as well. The tendency for many is to leave important issues like asset protection planning for another day, but doing so can have a negative impact on both business and family.
Female business owners can get a head start on protecting business and personal assets by:
Creating a succession plan for the business. Female business owners with partners should execute a buy-sell agreement to protect each other’s business interests; without one, the ownership of the business could pass to a partner’s spouse or children. Business partners should also consider purchasing life insurance for each other to ensure there will be cash on hand to buy shares back from a deceased partner’s estate.
Gathering trusted advisers. An advisory team for female entrepreneurs should include a business attorney, a financial planner and a CPA at the least. By having a team already in place, you can avoid any missteps when making difficult decisions.
Protecting personal assets. Choosing the right business structure is critical to asset protection. Limited Liability Companies (LLCs) and corporations provide business liability protection for personal assets that sole proprietorships and partnerships do not. In addition, establishing trusts to protect assets from potential creditors or divorce is critical for any business owner.