Sole traders are basically the highest risk you’ve got. In terms of asset protection, it is a continuum of how comfortable you are with risk.What we want to do when clients come on board is educate them on the principles around asset protection and some people start really far around the higher risk side. What we want them to do over the course of working together is kind of slowly move over towards low risk.
In terms of how we might do that, if a company, trust or a combination of the two and its set up correctly, it will take you about halfway along this continuum.
There are still things that can affect it but a company is a separate legal entity and this concept is called the corporate veil. It acts like a wall, so if a missile is shot at your business, there is still a wall that it needs to get through before it starts taking your personal assets.