You may think that your business is protected because you made the prudent decision to operate it as a corporation or limited liability company, hold annual meetings, file appropriate documents with the corporation commission and maintain corporate formalities
Mesa / Phoenix, AZ (PRWEB) July 16, 2009
Often a profitable business expands into other areas - a new product line, a second business location or a related business undertaking - but instead of legally separating the ventures, expenses and revenues are run through the existing company, leaving it vulnerable to unnecessary risks.
"When you operate too many business ventures out of the same company, you place all of your ventures at risk," says attorney Scott F. Gibson, founding partner of Gibson Ferrin & Riggs, PLC.
"It is vital to segregate each business enterprise into a separate corporation or limited liability company," says Gibson, who has practiced business law for more than 20 years. "This allows business owners to treat each portion of their business enterprise as what it really is - a separate and independent business undertaking."
"This increases accountability," he explains. "Each business venture either makes or loses money on its own merit. A wildly profitable store is not dragged down by an unproductive location. Separateness also allows you to make business decisions based on the merits of each unit."
In his new e-book, "Ten Fatal Mistakes that Business Owners Make (And How to Avoid Them)," Gibson shows the risk involved in failing to separate business enterprises - a mistake that could prove fatal for any business. He offers specific advice on how to prevent this type of situation as well as other important tips. The free e-book is downloadable from the firm's website at http://www.gfrlaw.net/firmpublications.aspx .
"You may think that your business is protected because you made the prudent decision to operate it as a corporation or limited liability company, hold annual meetings, file appropriate documents with the corporation commission and maintain corporate formalities," says Gibson. "And yet your business may still be at risk."
He explains that in a consolidated business operation, a company faces a number of unnecessary risks because an unproductive store or product line can hinder or even bankrupt the entire company, even if other stores or product lines are profitable.
On the other hand, an entire company is liable for possible injuries that occur at one store as well as being responsible for defective products sold at any of the stores.
"There are so many advantages of separating the entities and just too many risks if you don't," Gibson says.
The lawyers at Gibson Ferrin & Riggs, PLC concentrate their practice on serving individuals, families and small business owners with business-related issues, family law and estate planning. They can help identify and assess the things that matter most to their clients and work to preserve, promote and protect them. Visit their website at http://www.gfrlegal.com and their blog at http://www.biziboom.com . The firm's expertise in commercial litigation and business, family and estate law is recognized throughout the Mesa / Phoenix area. Call attorney Scott Gibson at 480-633-8100 with any questions on business law or to schedule a confidential and comprehensive consultation.