Alienation of Assets
In commercial terms, the world revolves around insolvency. Insolvency is the process whereby one's entire patrimony (i.e. the totality of one's assets) is liquidated in order to satisfy his total debts that have grown beyond his means. Insolvency procedures are problematic in that they mean liquidation of personal assets such as one's home and one's car. Unfortunately there are few ways to avoid insolvency, which most normally occurs through poor judgement or 'bad luck'. Fortunately, there are numerous ways in which the potential implications of insolvency procedures can be minimised to prevent loss of assets. For the lay-man, this can involve certain minor legal procedures which could ultimately save a fortune. For creditors, this can be particularly bad news. In this article we will look at entirely legal ways in which you can potentially avoid losing assets in insolvency procedures.
If you are running a small business, or likely to do so in the next decade, you must act on the following immediately to protect your assets. Alternatively, if you foresee yourself amassing significant unsecured debt in the coming years, you should also act similarly. Allowing a ten year margin, which might seem a lot, will prevent any challenges on sequestration and ensure that the assets you have 'alienated' no longer form part of your estate. The alienation ensures that the assets from which you will still benefit cannot be received by your creditors in consideration for any debts you accrue.
The first thing to consider is incorporating a limited liability company, or indeed several, within which to house your business operations. Conducting your business through a company may mean more paperwork, but it also removes you personally from any liability. Of course, your company can still be liquidated, but we will look at ways to avoid losing your business assets shortly. If you choose not to run through a corporate body, there are still ways in which you can minimise the potential for losing your assets.
The biggest and most valuable asset most of us will own is our home. It shouldn't come as any surprise that this is the number one target for many creditors. If you are married or living with a partner, there is no way you should ever lose your house in insolvency proceedings. Provided you allow sufficient time (i.e. 10 years), you can transfer ownership to your partner, thus the asset no longer belongs to you. You can then by agreement negotiate with your partner to continue living in the house, which for most will be a mere formality. At the end of the day, you no longer legally own the house, but functionally nothing has changed. Alternatively, you could assign your property by creating a trust in which you and your partner are the beneficiaries. All you need is to involve a third party (potentially even your partner) as trustee, before you will have alienated the asset. Again, functionally, you still live in the house, and it is still your home. The only difference is creditors can't touch it should the worst happen.
If you choose to run a through a limited company, your first step should be to establish at least one other company, which will act as a holding company. The holding company should then be made owner of all business assets, before effectively leasing back to the other company. The effect of this is theoretical. You own both companies, you own the assets, but should creditors attempt to attack your primary trading company, there will be no chance of losing your business assets. The leasing agreement between the two companies will also be theoretical, and will only require minor accounting procedures to grant legal validity. Provided you ensure your holding company avoids debt, there should be no problem in alienating your entire business patrimony.
There are a number of ways in which you can avoid potentially losing your assets in insolvency. Why not consult a specialist legal adviser for further information specific to your jurisdiction to help ensure total protection of your entire means.
In commercial terms, the world revolves around insolvency. Insolvency is the process whereby one's entire patrimony (i.e. the totality of one's assets) is liquidated in order to satisfy his total debts that have grown beyond his means. Insolvency procedures are problematic in that they mean liquidation of personal assets such as one's home and one's car. Unfortunately there are few ways to avoid insolvency, which most normally occurs through poor judgement or 'bad luck'. Fortunately, there are numerous ways in which the potential implications of insolvency procedures can be minimised to prevent loss of assets. For the lay-man, this can involve certain minor legal procedures which could ultimately save a fortune. For creditors, this can be particularly bad news. In this article we will look at entirely legal ways in which you can potentially avoid losing assets in insolvency procedures.
If you are running a small business, or likely to do so in the next decade, you must act on the following immediately to protect your assets. Alternatively, if you foresee yourself amassing significant unsecured debt in the coming years, you should also act similarly. Allowing a ten year margin, which might seem a lot, will prevent any challenges on sequestration and ensure that the assets you have 'alienated' no longer form part of your estate. The alienation ensures that the assets from which you will still benefit cannot be received by your creditors in consideration for any debts you accrue.
The first thing to consider is incorporating a limited liability company, or indeed several, within which to house your business operations. Conducting your business through a company may mean more paperwork, but it also removes you personally from any liability. Of course, your company can still be liquidated, but we will look at ways to avoid losing your business assets shortly. If you choose not to run through a corporate body, there are still ways in which you can minimise the potential for losing your assets.
The biggest and most valuable asset most of us will own is our home. It shouldn't come as any surprise that this is the number one target for many creditors. If you are married or living with a partner, there is no way you should ever lose your house in insolvency proceedings. Provided you allow sufficient time (i.e. 10 years), you can transfer ownership to your partner, thus the asset no longer belongs to you. You can then by agreement negotiate with your partner to continue living in the house, which for most will be a mere formality. At the end of the day, you no longer legally own the house, but functionally nothing has changed. Alternatively, you could assign your property by creating a trust in which you and your partner are the beneficiaries. All you need is to involve a third party (potentially even your partner) as trustee, before you will have alienated the asset. Again, functionally, you still live in the house, and it is still your home. The only difference is creditors can't touch it should the worst happen.
If you choose to run a through a limited company, your first step should be to establish at least one other company, which will act as a holding company. The holding company should then be made owner of all business assets, before effectively leasing back to the other company. The effect of this is theoretical. You own both companies, you own the assets, but should creditors attempt to attack your primary trading company, there will be no chance of losing your business assets. The leasing agreement between the two companies will also be theoretical, and will only require minor accounting procedures to grant legal validity. Provided you ensure your holding company avoids debt, there should be no problem in alienating your entire business patrimony.
There are a number of ways in which you can avoid potentially losing your assets in insolvency. Why not consult a specialist legal adviser for further information specific to your jurisdiction to help ensure total protection of your entire means.
Animal Control
In America today, there are states that are actively pushing pet owners to be controlled by law. States such as California are enacting laws in which pet owners are forced to spay or neuter their pets. This is something that many are talking about as the answer to the pet over population problems. Is this truly the answer? Many prominent breeders are upset by this attempt to control the rights of individual pet lovers.
What is the correct answer? Should the states be allowed to force individual pet owners to do this? What about the puppy mills that are operated in states all across the country, why is something not done to shut them down, rather than force individual breeders to have their breeding stock spayed and neutered. Many do not realize that the sport of dog showing requires a dog in the show ring to still be intact; any sexually altered dogs are immediately disqualified from competition
This essentially means, the sport of dog showing in California and other states following in their path is stopped. The dogs in the state would be required to be fixed, with residents in the state either fixing their dogs, or a flux of residents would be moving from California and other cities with the same philosophy. Is this really the solution to the over population problem? Most cities have many unwanted animals in the pet shelters, yet there is always a fresh batch of animals coming in daily, therefore it is evident that some remedial action is required to solve the problem. However, as a nation of animal lovers, this seems hard to reconcile with the general opinion of society.
How do we solve this problem? Perhaps the answer is more low cost spay and neuter programs, offer this at a greatly reduced rate, or even free to residents of towns so that animals can be easily fixed that are not intended for breeding. While this would be an expensive venture, it could easily cost less and do more good for the over population problem than requiring all pets be neutered and spayed.
Some states are even looking to limit the number of pets that are allowed to be housed. The limit is typically two dogs, with all other dogs forced to be rehomed to other homes. This leaves the problem of owners being forced to give away dogs to homes that may not be able to handle, care, or ensure proper medical care. Is this too far for the states to interfere in the rights of pet owners? To what extent should the government intervene in the way in which we treat our animals?
When did the issue of pets become the business of the government and states? While there are leash laws, they are intended for the safety of the pets, as well as the protection of society in general. This is a law that was enacted by the states, which while it does limit the movements of pets it has good intentions that are actually plausible and rectifiable. The required neuter and spay is something that can cause harm to a person's livelihood, as well as disqualify a dog from the show ring that could have otherwise been a champion dog.
Is this the state's place to do so? How far is too far before determining that the states have no right to tamper and meddle with the animals that are owned and properly cared for. Should individuals who seek proper medical care for their pets be penalized? Is this something that should have ever been brought up in the states as a requirement for all pet owners? The issue of pet control is certainly hot at the moment, and it will be interesting to see the development of these issues in the coming months, years and decades as implemented measures are observed and their results monitored.
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