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Funding Your Entities

April 13, 2006

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When using holding and operating companies in a multiple-entity approach, there are ways to strategically invest in the business that minimize the risk of loss.

To be effective, any asset protection plan must include a strategy of minimizing the amount of vulnerable capital invested within the operating entity. Specifically, the operating entity's business assets can be protected through:

• the owner personally owning and leasing exempt assets to the operating entity
• a strategic combination of equity and debt funding
• encumbering the operating entity's assets with liens that run in favor of the holding entity or owner
• a practice of regular withdrawals of vulnerable funds as they are generated

In addition, see our Case Study -- Funding Multiple Entities

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