Are personal assets safe if I do not incorporate my Massachusetts business?

Pete (Guest) on Wednesday, November 14 2012, 09:26 AM
I would like to know if I must incorporate to protect my property and ensure that I cannot be sued for my personal assets. Do I protect my assets by selecting a business entity or through insurance?
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    Replied by Attorney Howard Goldman on Wednesday, November 14 2012, 09:46 AM · Hide · #1
    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.
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