Is Your Goal to Separate Your Business and Personal Assets?
(Why You May Still be Exposed)

Most clients who call NCP recognize the dangers of operating as a sole proprietorship in today’s litigious society, and have wisely decided to form a separate legal entity for their business. They know that even with insurance, if they’re caught in a lawsuit they may be financially paralyzed and unable to obtain access to their own money.

You know the odds are against any first time business owner. Over 95% of all new businesses fail in their first five years. The number one reason? Lack of cash flow. (There are many factors that affect this lack of cash flow)

Despite best intentions, these two circumstances can still lead to a big problem: What happens when you form a corporation or LLC for your business to help insulate your personal assets, but your business fails? (Remember, the reality is that any new business only has a 5% shot at success.) What about all those personal guarantees, business credit cards, bank loans… all in the business’ name, but guaranteed by you? The end result: You may end up losing all of your personal assets even though you have incorporated or formed an LLC, and even if your corporate or LLC veil was NOT pierced. You can still lose everything!

How is this possible? Keep in mind that when you operate your business, you will be working with vendors and businesses who provide trade credit for your company. That basically means they will provide their goods and services on consignment. Most start-up businesses do not have a strong enough business credit score to allow the business to stand on its own. In fact, most businesses may not have a strong enough business credit score even after 3-5 years. By then it may be too late!

We call this the “Circle of Liability™ (Financially)”! These days, it’s just not enough to only set up your corporation or LLC. You must also determine how you’ll separate your personal and business credit.

Here is what may go wrong if you do not separate your business and personal credit:

• Your personal credit score may drop by as much as 100 to 200 points in the first two years of business, based upon vendor inquires that you are probably not aware of. (We don’t need to tell you what that will do to your ability to get access to capital, and the interest rates you will pay.)

• You will have to pay COD, cash up front for all your supplies and vendors.

• You may be forced to give away a part of your business because of cash flow problems.

• You may lose contracts and bids — and have no idea why!

One key to success is to have a plan to develop the business credit of your company separate from your personal credit. Within three to six months, your company can be in a position to stand on its own with our Business Credit Builder Program. Your business will receive tremendous benefits, and you will have control of your financial picture.

Below is a review of two major concerns to any business owners:

• The “Circle of Liability™ (Legally)”
• The “Circle of Liability™ (Financially)”

NCP’s goal is to help you with two essential strategies:

1. Incorporate your business
   1. By utilizing either Nevada or your home state
   2. By determining which business entity is best for your particular situation.
2. Separate your Business and Personal Credit.

It really makes no sense at all to separate your business and personal liability and NOT separate your business and personal credit. Without taking both steps, even in the absence of a lawsuit, if you have financial problems, you could lose your personal assets.

Example 1: Why Incorporating is Not Enough

The “Circle of Liability™ (Legally)”

Operating Your Business as a Sole Proprietorship=

1. Unlimited personal liability
2. Bad marketing perception
3. Financial Paralysis!

-instead of “do you have any judgments –now “are you currently involved in any lawsuits!”

Example 2: Why Incorporating is Not Enough!

The “Circle of Liability™ (Financially)”

Operating Your Business as a Sole Proprietorship=

1. Unlimited personal liability
2. Bad marketing perception
3. Financial Paralysis!

Solution

Step 1: Incorporate. Benefit: You operate your business as a separate legal entity, thereby protecting your personal assets from your business liabilities (this assumes you operate your entity properly; additional recommendation-Incorporate in Nevada first.

Step 2: Separate your BUSINESS and PERSONAL CREDIT: Why this is a problem: 95% of businesses fail due to lack of capital (cash flow). The end result is they go out of business. If the business owner personally guaranteed many of their vendor contracts, the individual is PERSONALLY FINANANCIALLY LIABLE! Result: You potentially will lose most of your personal assets (the very problem you were trying to avoid by incorporating!)

Benefit: By separating your business and personal credit you reap these rewards:

· Improve your cash flow by obtaining terms with vendors (even with a brand new business)

· Increase trade credit lines faster, thereby conserving your cash.

· Avoid many personal guarantees.

· Protect your personal credit score.

· Develop a separate credit profile for your business so it will stand on its own!

The Complete Solution is to do BOTH: Incorporate and separate your business and personal credit!

Call NCP today at (888-627-7007) and ask how your business can develop business credit immediately!