Should you incorporate your equine related business? Protect your personal assets from liability
We are often asked whether it is advisable for an equine related business to incorporate into a limited liability company. It is becoming increasingly common to hear of stories where traders, trainers, riding school owners and others within the profession lose their savings, vehicles and other personal assets (even their horses), or their homes, due to a horse related business setback.
We know how busy equine professionals are and we know many are concerned with the complexity of incorporating into a limited company. However, incorporating your horse related business is not only simple but one of the most important steps to attempt to minimise your personal liability. Trading through a limited liability company or limited liability partnership allows you to separate your personal or family’s assets (bank, accounts, personal belongings and even your house) from your business assets.
There are a variety of scenarios and possibilities which could lead to personal liability. For example, if you are an instructor and someone is seriously injured whilst you are giving them a lesson, or if a third party is injured in an accident involving a horse in your care or ownership, you could be held liable to them in damages leaving you with a large bill to pay. In each scenario the payment of any damages could extend to your personal assets.
Incorporating your business will ensure that the funds available to satisfy any damages and other monies you are held liable for will only extend to the assets of the company, not your personal assets, thus protecting your home and other personal assets in most cases.
There are many other advantages to incorporating your business, not only does it add to the professional element of your business and credibility, but it is an effective way to promote your business and increase its exposure within the equine market place.
Incorporating your business along with having the correct procedures, contracts and insurance in place will help minimise risks. This, in the current economic climate coupled with, as we all appreciate, the unpredictability of our beloved horses, could be extremely beneficial.
If you are a member of British Dressage you are entitled to a free half hour of legal advice with us as part of your membership and discounted rates on standard documents.
The process to incorporate is simple and need not be expensive, if you wish to discuss the opportunity to incorporate your equine related business with a legal professional, or if you wish to discuss the other entities available to you (such as limited liability partnerships) please contact Rachel Nolloth on 01242 246410 or RNolloth@hcrlaw.com or Head of Equine at Harrison Clark Rickerbys Alison Goodwin firstname.lastname@example.org 07966613829.