Can a company protect my assets?

I often get asked "If assets are owned by my company, are they protected from my creditors?". The answer is usually no. Why?

If you own the shares in the company, then the shares are assets in your name which can be attacked by your creditors. If they get your shares, they get the assets. So no protection there.

If, on the other hand, you own shares in two companies, the creditors of the one company cannot attack the assets of the other company simply because you're the shareholder of both. The "Limited" in (Pty) Ltd means that the shareholder's risk is that of losing his investment in the shares of the company. Creditors of a company cannot go after the shareholder.  They can, of course, go after anyone who has signed surety for the debt.

So, how to protect assets? They must be owned by a living trust or, if they are income earning assets, by a company which is, in turn, owned by a trust.

You do not own trust assets, so they cannot be attached by your creditors.



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