Wealthy New York business owners are no strangers to complex financial issues. Most are also undoubtedly aware of how important it is to be fully aware of finances, even if someone else manages them. If someone files a lawsuit against a business, the owner will want to know what assets are at risk and what can be done to protect them.
When launching a business, owners choose a specific structure. If registered as a sole proprietor or under a general partnership, a lot more may be at stake in a business lawsuit than the owner realizes, including personal assets. On the other hand, if a business is registered as a limited liability company or corporation, personal assets are separate from the business and cannot be seized for damages in a business claim.
What if a business doesn’t have enough money to satisfy damages?
If a company loses a business lawsuit, and the court orders it to pay monetary damages, numerous assets may be at risk, especially if there are not enough funds on hand to cover the award. In such cases, other assets may be seized, including tax refunds, stock options, commissions, royalties, and more. In a sole proprietorship or general partnership, personal items, such as a boat, real estate or jewelry, may be seized to pay a debt owed to the plaintiff for damages.
Strong legal support is the best way to protect assets in business litigation
When a New York business owner learns that someone has filed a lawsuit against the company, the best thing to do to begin protecting assets is to seek consultation with an experienced business law attorney. In fact, many companies retain attorneys full-time, just in case legal problems arise. An attorney can review a specific case and determine the best course of action to minimize economic damage and achieve positive results in court.