Generic selectors
Exact matches only
Search in title
Search in content
Search Products
Filter by Categories
B-BBEE
Blog
Company Secretarial
Featured
General Business
General Interest
Investing in Property
Marketing
Personal Growth
Personal Wealth
Tax
Trusts and Estate Planning
Uncategorized

I often get asked “If assets are owned by my company, are they protected from my creditors?”. The answer is usually no. Why?

If you own the shares in the company, then the shares are assets in your name which can be attacked by your creditors. If they get your shares, they get the assets. So no protection there.

If, on the other hand, you own shares in two companies, the creditors of the one company cannot attack the assets of the other company simply because you’re the shareholder of both. The “Limited” in (Pty) Ltd means that the shareholder’s risk is that of losing his investment in the shares of the company. Creditors of a company cannot go after the shareholder.  They can, of course, go after anyone who has signed surety for the debt.

So, how to protect assets? They must be owned by a living trust or, if they are income earning assets, by a company which is, in turn, owned by a trust.

You do not own trust assets, so they cannot be attached by your creditors.

 

0 comments

XHTML: You can use these tags: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>

Need help with your Trust or Business?

Contact us today or set up a free meeting with our CEO, Derek Springett. We have been offering expert advice and business services since 1971. You can also view see our full list of services.

If you enjoyed this article, you may like to subscribe to the monthly round up featuring all of my latest articles. Then check out the three books I have written which have proved to be very popular.

Complete the form below to subscribe to my monthly round up.