Yes there is a risk that you could lose assets in a business lawsuit, but it is not always the case. If your business is a sole proprietorship, all of your personal assets are tied up in your business. Meaning, if your sole proprietorship is under a lawsuit, it is possible that your personal assets, including your home and car, may be used to satisfy debts. However, Limited Liability Companies are a business type that prevents your personal and business assets from being combined. Under an LLC, those going after your business in a lawsuit will only be able to touch what is a part of your business. So while you may lose your business assets, your personal assets will be safe. There are situations where you can lose your personal assets under an LLC. If you personally guarantee a business loan, mix personal and business finances, commit fraud, or engage in illegal activities, you may not be protected by your LLC. It is essential to keep your business above board, and keep your finances separate. For more legal advice on running a business and ensuring that you protect your personal assets, reach out to our experienced business attorneys.