Will my personal assets be safe if I choose not to incorporate my business?

Additional Information:

I own property and wondered if I MUST incorporate to ensure that I cannot be sued for my personal assets. Or is there insurance for this?

ATTORNEY ANSWER:

The simple answer is “no” your personal assets will not be safe. Sole proprietors and general partners in a partnership are personally and jointly responsible for all the liabilities of the business such as loans, accounts payable and legal judgments. In a corporation, however, stockholders, directors and officers typically are not liable for the company’s debts and obligations. They are limited in liability to the amount they have invested in the corporation. Insurance can help protect your personal assets, but you would not have insurance coverage for all types of debts a business may have. For example, if you sign a lease and then default on the payments, most insurance policies would not cover this debt.  There are other legal vehicles other than incorporation which could also help protect your personal assets such as a limited liability company and/or a limited liability partnership. You should meet with an attorney to discuss the best vehicle is to protect your hard earned personal assets.

The Greater Boston Metro business Attorneys at Goldman & Pease provide legal services to entrepreneurs and all businesses and serve the Greater Boston region including Alston, Arlington, Belmont, Brighton, Brookline, Cambridge, Canton, Dedham, Dover, Milton, Natick, Needham, Newton, Norwood, Waltham, Watertown, Wayland, Wellesley, Weston, West Roxbury, Westwood, and all of Massachusetts.