Q: Setting up a LLC in Colorado.
What is the recommended way to set up a new LLC to protect myself from having my wages garnished at my employer and safeguard my personal assets if my business fails, especially if it has LLC has business loans?
A:
To set up an LLC in Colorado and protect your personal assets and wages from garnishment, ensure the LLC is properly formed by filing with the Secretary of State and maintaining separation between personal and business finances. Avoid personally guaranteeing business loans, as this could expose your personal wages and assets to garnishment if the business defaults. Draft a detailed operating agreement and keep the LLC compliant with state regulations (e.g., annual reports and taxes). Additionally, consider liability insurance to protect against lawsuits.
An LLC shields your personal assets, but wage garnishment can occur if you personally guarantee debts or are found liable for fraud or negligence. Consulting a lawyer is critical to structure your LLC correctly and safeguard your finances.
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