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Creditor-Proofing - Myths and Reality Archives

Asset sheltering basics for business owners

The fruits of a business owner's lifetime of hard work can vanish almost instantly with the insolvency of a company. Unfortunately, in the heady, frantic days of business startup, many owners may be too focused on success to think about protecting themselves and their assets from the possibility of failure.

How holding companies may be beneficial to businesses

Opening one's own business is a dream for some. People who decide to follow this dream often put a lot on the line to do so. If the business does not perform as expected, financial problems could arise. Depending on the specific situation, those problems could financially decimate those behind the business. This outcome may be eliminated, or at least minimized, through proper planning. One method that may be employed to protect the assets of a business is to create a holding company. If the assets of the business are owned by a holding company, and leased to an operating company that carries out the business, then the failure of the business does not mean the assets are at risk.

RRSPs exempt

One of the few "creditor-proofing" steps that actually works involves that old-fashioned investment your parents and accountant have been recommending for decades: RRSPs. Under changes to the law which came into force in July, 2008, money invested in RRSPs is exempt from creditors.

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