In some instances, we use them in our tax strategies to cut your taxes. Digital assets are the foundation of the digital revolution.
Every business should inventory all their intellectual assets. This will include web site, domain name, trade secrets, patents, copyrights if they aren’t documented, document them. Hold all your intellectual & digital assets in an LLC. Then license them to your operating entity so they can use them.
The LLC will never do anything that will get them sued. That will keep them safe if your operating entity gets sued
Intellectual assets can solve every inadvertent outside threats besides competition that can potentially destroy your business and it’s value. Corporate structures & intellectual assets add flexibility to your organization, not complexity. Together, they make it possible to pivot on a dime, when it would otherwise be impossible.
Intellectual assets makes it possible to turn your income from business profits to royalty income, removing the tax problems that business income presents. But that may not be a good idea in certain circumstances.
The best business structure for the chaotic, tumultuous 21st Century is a combination of multiple companies, each serving a particular purpose. Intangible assets, such as patents, copyrights, trade secrets, digital properties & web domains, should be put in an a single purpose LLC where they’ll be safe from lawsuits, and licensed to the operating company.
We protect your business and your vital business assets through business restructuring and intellectual property rights. This approach has the ability to preserve your business and all its vital assets through serious threats to survival.
First we identify all your intellectual property. This includes trade secrets, trademarks, copyrights, websites, business name, customer databases, software, coding, digital products, art work, photographs, mailing lists, email lists, customer lists, content, practices & procedures and any other intangibles that make your business what it is. Right now, many of them are unrecognized and undocumented.
Then we create an LLC and transfer all intellectual property to it. Generally we create a WY LLC. Then we document any intangible that’s undocumented so we can definitely place it in the LLC. Just saying so doesn’t work. A legal document or other contract between the principals and the LLC will work. Anything to get the asset documented as being owned by the LLC.
If the business has assets such as trucks, desks, computers, buildings, etc., we create another LLC to transfer them to. It’s generally not a good tax decision for corporations to own capital assets like buildings. WE also document these assets with leases between the corporation operating the business.
Then we create a new operating entity, which will be either an S corp. or a C corp. That protects you from a claimant getting access to your personal or LLC business assets. Financial penalties will be built in to protect the ownership LLC from financial loss in the event the operating corporation goes broke, gets sued, or otherwise can’t continue operation to the term of the license. This prevents the corporation from losing any cash due to a lawsuit or action by a creditor.
The operating corporation licenses the right to use any and all of your intangible assets. This requires one or more additional contracts specifying that in certain events, all licensed rights will be forfeited by the corporation. The operating corporation leases all the assets of the Asset LLC with the same terms.
If you get sued or your corporation goes bankrupt, you simply abandon the operating corporation. You close it down legally with the state of incorporation, so it no longer exists. Then you form another corporation, license all the intangible assets the previous company was using, and lease all the asset the previous company was using. I literally just did this with a company that was being sued. The liability does not transfer to another company.
If someone is complicit in something illegal that caused the issue, that individual can be sued. Just don’t do anything illegal or unethical.
Then you just start up again. Same name. Different entity. Different company.
“Today, President Obama signed the Defend Trade Secrets Act of 2016 (“DTSA”) into law, bringing trade secrets alongside trademarks, copyrights and patents as intellectual property rights protected under federal law.” May 23, 2016.