Engaging in business exposes you to the risks of being sued. To save your personal and business assets from the lawsuits, you must take legal steps to protect it.

Incorporating is a means of guarding against the potential threat of lawsuits and various claims:

• Single Incorporation – Protecting your personal assets

Incorporating a business is like erecting a legal wall to separate your personal assets from your business.

In any event, any judgment against your business will not affect your personal assets. Your home, savings, stocks, properties, etc. remain intact and protected.

• Double Incorporation Strategy – Protecting your business assets

The double incorporation strategy involves the creation of two business entities. The first entity, which is the "at risk" business, is the one that interacts with people and customers.

The second business entity is the "holding corporation" which is created to own the valuable assets and properties of the company such machinery, equipment, popular domain name, custom software, and other items. The holding entity leases its assets to the "at risk" company to operate the business as a whole.

In any case, when a judgment is rendered on your "at risk" business, the second entity which the holding company, will retain possession of your property, assets, and equipment.

The Process of Incorporation in California

If you need to do business in California, you need to protect your interest by having a formal business entity. Incorporation is the way to shield your business from lawsuits and claims. You can only achieve this by incorporating your business to give it an official name and a legal background.

The incorporation process in California normally takes only two weeks. With the help of a good business lawyer, you can begin the process at the office of the Secretary of State. The process will require you to obtain business documents such as business name, a bank account, filing of all papers to form the entity, creation of bylaws, minutes and stock issuances to make the entity valid.

Who Can Help You

If you are going to incorporate a business in California, it is necessary to have a good understanding of the bureaucracy. A business lawyer who specializes in corporate matters can help you protect your personal as well as business assets. His skills, experience and expertise in the area of the law can assist you in processing the incorporation papers of your business.