Entrepreneur's Journal: Protecting personal assets when the business dives

In other words, it's a good idea to consider some strategies for asset protection. To this end, I had a chance to interview Hillel Presser, who is a lawyer and the co-author of Financial Self-Defense: How to protect everything you own from everyone everytime!

Here are some of his recommendations:

Incorporate: Running a business in your name as a sole proprietorship or partnership is one of the worst things you can do. Rather, to have some level of liability protection, it makes sense to form a corporation.

Personal Guarantees: Unfortunately, a corporation will be useless if you sign personal guarantees. As much as possible, try to put company debts in the company name -- not yours.

Separate Assets: Let's say you have three restaurants. In this case, you might want to make each one a separate corporation. Thus, if one restaurant gets in trouble, it will not drag down the others.

Or, you can setup separate corporations to hold intellectual property and other assets (like equipment). In turn, you can lease or license these assets to your main business.

Offshore: There are a variety of strategies to place assets offshore. But, this is a complicated area and requires the help of legal counsel.

"An attorney can instruct the business owner how to title various assets and how to operate his companies to minimize taxes, minimize asset exposure, and maximize profit," said Presser.