5 Ways to Protect the Assets of Your Business
5 Ways to Protect the Assets of Your Business
Risk is an unavoidable aspect of doing business. The key is to understand those risks inherent to your business and its operations so that you can take the appropriate steps to protect business assets and minimize loss. While there are many ways you can do this, here are my top 5 ways to protect your business assets.
1. Make sure the business maintains good standing status
Know the laws, rules and regulations that apply to your business and its activities and make sure all industry and government reporting and registration requirements are kept current. You can’t run a successful business and protect its assets if your company has been dissolved for failing to comply with annual company law requirements.
2. Keep your company’s confidential information, confidential.
To do this you will have to know exactly what information is confidential and just how valuable it is to the company. Assets worth protecting can include trade secrets giving the company a competitive advantage, marketing and sales strategies, customer and personnel records, accounting and undisclosed financial information, and future plans for development. Once identified policies and procedures are key to informing everyone on what the company considers to be confidential information, how and under what circumstances it is to be used and what to do when something is not kept confidential.
3. Get insurance
It’s a fact that unexpected events do happen. There are several kinds of insurance that can protect your company’s assets and minimize the loss that may result from those events including key-person insurance, business interruption insurance and liability insurance. Directors will also want to consider director’s insurance.
4. Be Prepared for marriage and common-law relationship breakdown
It has long been law that business assets can be considered joint assets when a well-established marriage or common law relationship breaks down. However changes to B.C.’s family law legislation in March, 2013 mean committed relationships of two years or more between opposite sex and same sex couples will also be recognized at law. Having a cohabitation agreement or marriage agreement in place will go a long way toward protecting business assets regardless of the nature of the relationship when it breaks down.
5. Have a plan
Last, but by no means least, develop a plan that can protect company assets from creditor claims before something happens. This includes being able to ask, and answer, the following questions:
- Who could be a creditor and what kind of claims could they make? Think about all the possibilities both from within as well as those that are external to the business operations.
- If the creditor’s claim is successful which assets are vulnerable and to what extent? It’s best to think outside the box on this one to make sure you include all potential risks. For example, a director’s assets are at risk if an employee is claiming unpaid wages.
- Can the assets be insulated from a risk of loss, and if so how? For a start, consider if business operations and other business assets should be owned by separate companies.
It takes a lot of hard work and long hours to acquire those business assets worth protecting and it only takes one or two creditors to lose them. Don’t let it happen by knowing what can happen to the assets of your business, how to minimize or prevent exposure to loss and having a plan in place.