His heart is pounding and he stops breathing for a second.

Are you crazy. Are you afraid. And you’re asking a question, “Why me?”

After that moment passes, you need to act fast. And that’s when you realize that you are in one of these two points:

(1) Are you ready, or
(2) You are a target.

I’m going to talk about the growing lawsuit trend and what you need to do TODAY to protect yourself.

A friend of mine who runs a charity just got a tip that she is being sued. That? Are people crazy these days? Suing a charity!

And not only that, they are also suing her personally.

Some people are happy. You have to be prepared not to lose everything if the worst happens.

There are three things you need to do now to prepare:

– Protect your assets with the right structure
– Follow the corporate procedures from the beginning
– Keep records up to date

Remember: in the United States today, there are more attorneys per capita than in any other country. And anyone can sue anyone at any time for anything. Protect yourself!

Step One: The RIGHT Structure for 2010 and Later Years

Set up the right business structure and you get three things:

– Optimal asset protection
– Less taxes
– Maximum flexibility

Twenty years ago, I would have told you that you need a corporation for your business. Today I have a different answer. There is a better solution.

Use a layered structure for optimal asset protection.

A corporation protects your personal assets against a business lawsuit. But a corporation does NOT protect your business against personal judgment.

Layered structures like Trust Sandwich and LLC Elected Entity will give you asset protection that protects BOTH your personal assets and your business assets.

It is not about how much you earn. It’s how long you stay. And that means keeping your assets safe.

It has never been more important.

Before moving on to the next two strategies, one more comment on protection. The number of IRS auditors doubled last year. And there are four more times this year. They are going to ask you exactly the same thing that the court would ask if they sue you.

Having the right business structure, with the right supporting documentation, is not just something that would be nice to have. In today’s world, it is absolutely essential.

Step Two: Configure the Structures Correctly!

You can do it yourself when it comes to your structures or use one of those cheap online services (which basically means setting it up yourself).

At a minimum, make sure your LLC has:

– Articles of organization
– Operation agreement
– Organizational resolutions
– Member interests issued
– Tax choice

These are the things that will be asked of you if you are sued or if the IRS conducts an audit.

Step Three: Keep Structures Legal and Safe!

Once you’ve set up your structures, that’s not the end. In fact, if you stop there, you may not have even gone to the trouble of setting up the companies.

LLCs and corporations need ongoing maintenance. If you don’t meet the annual requirements, everything you own will be at risk again.

Here are some of the things you must do annually for your corporation:

Annual meetings
Proper notification of the annual meeting
Resident / Legal Agent Service Renewal
Annual notice
State tax return
IRS tax return
Preparing annual minutes
Give ownership (if part of an estate plan)

Choosing, configuring, and running the right business structure is critical to a smart and successful business. Face it, if your business works, you will have tax problems. That means you need to have good solid protection to show that you really are a business with a business deduction.

If your business is down, you need some good solid protection even more to get the tax benefit of the loss.

A business turns a loss into cash, but only if there is a provable business behind it.

Protect your business and your investments with the right business structure at the right time. That moment is now.