Colin S. Ritchie

Jul 31

Steps Business Owners, People in Risky Professions and the Average Joe Can Take to Keep Their Assets Safe

In my last article, I (hopefully) explained how incorporating may not provide the liability protection people expect. In this one, I will explore some of the steps we can take to keep family assets safe, most of which don’t involve forming a company.

(a) Planning Ahead

The key factor in any of the steps mentioned in this article is when you take action; if you only start planning to secure your assets after the wolves are already sniffing at your door, then it is likely too late. Our legal system has some scary sounding terms like “fraudulent conveyance” and “fraudulent preference.” These terms apply to transactions like gifting or transferring assets to a family member for less than market value or paying out certain creditors and stiffing others. If a court determines that you have taken steps to thwart those aforementioned creditors after you are already insolvent or have creditors coming after you, then it can set aside the transactions.

Jul 1

Craving A Little Company: Things to Consider When Deciding Whether to Incorporate (Part 1)

Other than popping ‘the question’ to that special man or woman in your life, deciding whether or not to incorporate your business may be one of the most important decisions you ever face. Although I suggest that you get professional advice based on your personal circumstances, here are some of the things to consider before taking the plunge. Rather than trying to ram this down your throat in a single article, I’ll nibble away on this topic a little at a time over the coming weeks. Today’s morsel shall be on companies and liability protection.

Incorporating and Limited Liability

A company is treated as a separate person for most legal purposes. As a result, if the company runs into legal problems and has been clearly representing itself as a company so that everyone is forewarned, the business owners may be able to protect their personal assets from being exposed to the company’s creditors. Accordingly, even though your business might become a thing of the past, you may still be able to hang on to your home and other personal assets.

May 31

The Smith Manouevre – Cash Damming’s Aggressive Younger Brother

Introduction

Are you someone who enjoys playing the stock market, looking to reduce your taxes and willing to take some risks? If you have answered yes to all of the above, the Smith Manouevre might be the thing for you. This strategy takes advantage of the equity in your home, cheap, deductible interest and how dividends and capital gains are taxed to build a tax-efficient investment portfolio that hopefully puts you well down the road to financial independence.

May 14

Cash Damming – Robbing Peter To Pay Paul (And Writing It Off, Too!)

Introduction

In my last blog, I laid out the principles behind deductible interest, along with a few suggestions on how to organize your affairs so that you can increase the size of your tax refund to pay down your debts sooner. It is now time to up the ante and discuss some of the more advanced techniques available. Today, I’ll focus on a technique that is primarily used by unincorporated business owners: cash damming.