There’s a gambling saying that goes something like, “If you want to be a winner, you have to walk away from the table a winner.” One time-honored method of reaching this result is to systematically take your chips off the table as you win them, so that your potential for losses stays small.

Asset protection planning is all about taking chips off the table in good times, so that you still can walk away from the table a winner no matter what happens in bad times. Those who worry the most about asset protection are those who are the most likely to get sued; think obstetricians and, more recently, real estate investors here. But average folks often get caught up in difficult situations, and thus if you have something to protect then the topic of asset protection should at least cross your mind.

Technically, asset protection planning is the debtor’s side of creditor-debtor law. While creditors are concerned about the strategies and techniques of collection, debtors are interested in the strategies and techniques for protecting their most valuable assets from potential creditors.

But in this calculation, it is not just about protecting assets but also about making sure that one does not end up in jail for contempt or bankruptcy fraud for engaging in the process.

Keeping in mind the law school adage that “General rules are generally inapplicable”, the following 10 rules should always be kept in mind when you try to take your chips off the table.

1. Start Planning Before A Claim Arises

Many things you can do will effectively provide asset protection before a claim or liability arises, but few things will afterwards. That’s because what you do after a claim rises could be undone by “fraudulent transfer” law. Moreover, the point at which a claim arises is earlier than a layman might think—it is, for example, usually much earlier than when a demand letter or a process server shows up at the door.

2. Late Planning Usually Backfires

Asset protection planning after a claim arises is apt to make matters worse; think of it as getting a flu shot while you have the flu, and the shot itself making you even more woozy. It is a common misconception that the only thing a judge can do is to unwind a fraudulent transfer, leaving a debtor who unsuccessfully tried late planning no worse off than if he had done nothing. To the contrary, both the debtor and whoever assisted in the fraudulent transfer can become liable for the creditor’s attorney fees, and the debtor can lose the hope of getting a discharge in bankruptcy.

3. Asset Protection Planning Is Not A Substitute For Insurance

Asset protection planning should not be a substitute for liability and professional insurance, but rather should supplement insurance. It is a myth that asset protection plans invariably scare away plaintiffs, and an asset protection plan doesn’t pay legal fees to defend against a lawsuit. Insurance also supplements asset protection planning, since it can help a debtor survive a claim a fraudulent transfer claim. If you get sued, let the insurance company pay to defend it and pay to settle it — that’s what you’re paying the premiums for.

4. Personal Assets Are For Trusts; Business Assets Are For Business Entities

Business entities such as corporations, partnerships and LLCs are meant to be vehicles for commercial operations, not to act as personal piggybanks. When personal assets are placed into a business entity, the potential for the entity to be pierced by a creditor on some theory or another, such as alter ego, increases exponentially. The place to put personal assets is in a trust. There is a long and solid body of law that protects trust assets—when the trust is properly drafted and funded. And please don’t name the entity the “Family” Partnership or LLC, unless your family is famous for making sausage or some such.

5. Too Much Control Is A Bad Thing

Asset protection planning attempts to reach a balance between giving the client sufficient control so that the assets do not disappear, but at the same time not so much control that a creditor can successfully argue that the debtor and the asset protection structure are effectively one-and-the-same and thus should be disregarded on alter ego or some similar theory.

For more information, please proceed to

http://www.forbes.com/sites/jayadkisson/2011/07/13/ten-rules-for-asset-protection-planning/

Posted in International Business

The Cayman Islands operates Registers of Shipping and Civil Aircraft. George Town is a Port of British Registry. Over the years, Cayman has been included in most English merchant shipping acts, with the result that it is a Category 1 registry, entitled to register all classes of vessel.

The Cayman Islands Shipping Registry administers Cayman registration, and has a full professional staff for this purpose. The Merchant Shipping Law (2008 Revision) governs Cayman registration and lays down fee levels according to tonnage.
Aircraft are registered under the (English) Aircraft Navigation (Overseas Territories) Order 1989 (updated in 2007). The Civil Aviation Authority of the Cayman Islands maintains the register. The UK Civil Aviation Authority has discretion over Cayman registration, and in practical terms limits it to private aircraft.

The Air Navigation (Overseas Territories) Order 2007 came into force on January 9, 2008. The new Order consolidates the provisions of the 2001 Order and its four amendment orders and has also been substantially restructured to make it more user-friendly. A lot of the procedural and administrative material has been removed, largely from the schedules, and is now in the relevant OTAR Parts. A number of new provisions have been introduced, including those relating to regulation of corporate operations, and provisions have been introduced to enable Governors to give instructions concerning the equipment, performance and manner of operation of aircraft. Some changes have also been made to the airworthiness requirements; in relation to permits to fly; and in respect of the introduction of requirements for safety management systems.

In mid 2008, the Cayman Islands Shipping Registry had over 1,700 vessels on its books.
The Merchant Shipping Law of 1997 together with its amendments was commenced in July 1999 to revise, streamline and update the previous law. The law was based mainly on the United Kingdom (“UK”) Merchant Shipping Act, 1995, the UK Aviation and Maritime Security Act, 1990 and the UK Merchant Shipping and Maritime Security Act, 1997. It also embraced up-to-date convention requirements together with a number of innovations that address some of the specific needs of the Cayman Islands. These included: wider ownership, extended demise charter, enhanced mortgagee protection, registration and mortgage of ships under construction, mandatory minimum insurance, anti-piracy measures and clearer exercise of due diligence in the registration, deletion and representation of ships. The provisions of a number of ILO Conventions were also incorporated, covering the engagement and welfare of seafarers, recruitment and placement of seafarers, regulation on hours of work and rest, and living and working conditions of seafarers.

A similar revision exercise has taken place with the Merchant Shipping (Marine Pollution) Law. This Law places all applicable aspects of marine pollution into one comprehensive and up-to-date body of law. It incorporates relevant aspects of UNCLOS, MARPOL, the Intervention Convention, OPRC 90, the London Convention on dumping of wastes (including its Protocol of 1996) and the Hazardous and Noxious Substances Convention. Some applications that have a broader reach than strict pollution issues have been included in the Merchant Shipping Law. Examples include the Civil Liability Convention and the Fund Convention.
The third body of principal maritime legislation introduced was the Admiralty Jurisdiction Law, which came into effect in 2003. It was based on the UK Supreme Court Act, 1981 and incorporated the Arrest Convention of 1952. It operated as part of the Cayman Islands Grand Court Law and Rules.

http://www.lowtax.net

Posted in International Business

The Cayman Islands insurance sector is regulated under the Insurance Law 1979 as amended and revised in 2004 and 2008. Class A insurance licenses cover domestic insurance in Cayman itself; Class B licenses cover Cayman or (registered) foreign companies conducting external business; restricted Class B licenses are for captives. Applications for licenses are made to the Cayman Islands Monetary Authority (CIMA).

Legislation in 1998 introduced a Segregated Portfolio Company Law. The SPC is an exempted company which may create one or more segregated portfolios in order to segregate the assets and liabilities of the company held within or on behalf of the portfolio from the assets and liabilities of other portfolios. As originally passed, SPCs were available only to certain types of insurance company, but in 2002 amendments extended the provisions relating to segregated portfolios to any exempted company. In essence, the new law provided that any new company may apply to be registered as a segregated portfolio company. A segregated portfolio company must pay additional fees and must provide notice to the Registrar of the names of all segregated portfolio accounts created.

The changes allow an existing company to convert into an SPC, although a number of criteria will need to be met, including the written consent of each creditor of the company and the approval of the Cayman Islands Monetary Authority (CIMA). An SPC is also able to create separate portfolios by reference to a series of shares, as well as by reference to separate classes of shares.

The improvement to the SPC structure, adopted from Guernsey legislation, ensures that there is no ‘flow over’ from an insolvent cell to general assets. A key change for mutual fund issuers is a provision that secured creditors are able to enforce their security against a segregated portfolio, despite the existence of a receivership order against that portfolio. This ensures that a segregated portfolio is acceptable to – and can be rated by – the rating agencies in the same manner as an exempt company.
In 2004 the Cayman Islands had the second-largest captive insurance community in the world, after Bermuda. The year 2000 saw 48 new captives set up in the Caymans, bringing the total to 535. By the end of 2002 Cayman had 642 captives, having beaten Bermuda into second place for new formations in the year with 97 new companies.

Hurricane Ivan in 2004 damaged the Cayman Islands in physical terms, but did not halt the expansion of the insurance sector. According to CIMA, in the weeks that followed the devastating hurricane, nine licences were granted to captive insurance companies, and the authority also issued an insurance management licence to Strategic Risk Solutions (Cayman) Limited.
There were a total of 760 Class “B” companies under the supervision of the Insurance Supervision Division at the end of June 2010, 4 less than at the end of the previous quarter and 20 less than in December 2009. Pure captives and Segregated Portfolio Companies represent the two main categories of Class “B” entities, with 424 and 121 companies respectively.
In June 2008, the Cayman government elaborated on planned measures that would be taken during the 2008/09 fiscal year to further develop the reinsurance sector in the Cayman Islands. The measures are based on recommendations submitted to government on April 23, 2008 by the Reinsurance Task Force (RTF).

The RTF’s recommendations focused on promoting commercial certainty for prospective reinsurance firms, specifically through provisions in Immigration Law via the business staffing plan regime, as well as progressive approaches to the regulation of reinsurance companies in Insurance Law.
The RTF also recommended that reinsurance firms who wished to take advantage of the Cayman Islands as a location enter into a “social contract” with the government on career, education and training opportunities for Caymanians, reflecting a partnership approach to joining the Cayman Islands financial services community.
The RTF comprises senior and experienced figures in the Cayman Islands insurance industry familiar with the reinsurance sector as well as members from government’s Financial Services Council.
“The reinsurance business plays to Cayman’s natural strengths,” commented Alden McLaughlin, Minister for International Financial Services Policy. He pointed to Cayman’s institutional business specialization, including a vibrant insurance sector; existing professional infrastructure; experience in reinsurance products (sidecars and catastrophe bonds), and the presence of the hedge fund industry – a natural source of capital for reinsurers.
“We hope to attract industry partners who recognize our strengths and want to grow their reinsurance business in a conducive location,” said Minister McLaughlin, adding: “We also want to attract firms who will generate substantial activity for and in our financial services sector and who are willing to provide new careers and training opportunities for Caymanians.”

For more information, please proceed to:

http://www.lowtax.net

Posted in International Business

Cayman banks must be licensed under the Banks and Trust Companies Law (2009 Revision) (formerly the Banks and Trust Companies Law 1995, as amended in 2001 and 2003). The astonishing Cayman Islands banking industry had 265 banks under the supervision of the Banking Supervision Division at the end of June 2010, of which 18 held Class A licenses permitting local and offshore business activity, while the remainder hold Class B licenses, permitting only offshore business – a local office is allowed, but only very limited transactions can be carried out with Cayman Islands residents. Banks do not need to be incorporated locally: a foreign bank can register as a foreign company and then obtain a license. For further details of licensing requirements and procedures and fees payable
As of September 2009, total assets were reported at US$1.8 trillion, up 3.75% since the same period of the previous year when total assets stood at US$1.7 trillion.

A very wide range of services is offered: the 90,000 offshore companies registered in Cayman include many treasury management or investment management subsidiaries of multinationals taking advantage of the excellent banking environment and absence of taxation. Evidently, private banking is a major component of the industry: asset protection rather than tax avoidance as such is the driving force, so that the stability of Cayman alongside stringent banking secrecy and its sophisticated investment environment are very attractive to wealthy individuals, particularly those from the US where Cayman has a very good reputation.
Cayman Islands’ banks are supervised by the Cayman Islands Monetary Authority (CIMA), which concentrates on banks for which Cayman is the home-country supervisor. CIMA recently extended its bank inspection program to on-shore subsidiaries of Cayman banks.
Cayman signed a Memorandum of Understanding on cross-border banking supervision with Brazil in 1999, and intended to create a network of such agreements with all the countries whose banking supervisors evince interest in Cayman’s banking sector.

Following KPMG’s independent report to the UK Government on the regulatory regime in the Cayman Islands and other offshore financial centres in the autumn of 2000, CIMA made a ruling on private ‘shell’ banks that have no effective supervision because they are not units of established international banks, subject to stringent regulation in their home jurisdictions. Such mainly US banks had no physical presence in the Cayman Islands.

In 2000, the Cayman Islands introduced additional due diligence procedures for banks when they were required to comply with fresh Know Your Customer regulations. The original deadline of December 31, 2002 for the provision of information about customers to the authorities was extended, and the new rules came into force in March 2004.

The due diligence rules require both new and long-standing account holders in the jurisdiction to provide proof of identity and physical address, in addition to an explanation of their banking activities. The rules have provoked criticism from some quarters, particularly from those who have banked in the Caymans for many years, who argue that they are intrusive and unnecessary.

For more information, please proceed to:

www.lowtax.net

Posted in International Business

Planning how you exit your business is just as important as how you start it. The goal is to maximize the value of your company before converting it to cash, and to minimize the amount of time consumed.

Getting out of business is a process. The length of time required to complete the process is directly related to the complexity of the business, and the circumstances underlying this decision to get out of business. It can range from one week for a home-based sole proprietorship to several years for a corporation forced into involuntary bankruptcy. Disputes and litigation add another dimension to the time frame.

The process for exiting a business usually includes the following steps:
1. Reach Agreement & Obtain Authorization from Owners to Dissolve Your Business Entity.
Agreement and authorization to dissolve a business must be established under some acceptable, governing set of rules, such as the bylaws or partnership agreement. It is best to settle disputes quickly, and document any terms and conditions that apply.
2. Designate a Leader & Organize a Team.
Authority and roles should be clarified. The owner may be the only team member for a home-based business. For a large entity, however, the team may consist of the executive management team and important functional managers whose expertise is not represented: finance, human resources, legal. This group should be as small as possible for efficiency, and large enough to include the expertise required to cover the basic planning issues.
3. Engage Professionals & Consultants as Team Members.
For most small businesses, this group consists of the firm’s legal counsel, CPA, and a business broker or valuation expert. Professional expertise and advice in these areas will contribute to a smooth process and improve the outcome.
4. Perform a Thorough Review of Business & Identify Problem Areas.
Establish and maintain a problem list to focus on. Determine the condition of the firm’s records. Review transactions. Problems extend the timeframe and cost money.
5. Prepare a List of Assets & Perform a Physical Inventory.
The inventory is very important input to several activities. It is used to establish the value of the business, make decisions and manage disposition of assets, and it becomes the basis for tax calculations and tax returns.
6. Perform a Valuation of the Business.
It is difficult to make prudent decisions without knowing the market value of the business and its assets.
7. Prepare a Detailed Plan & Assign Responsibilities.
8. Develop a Schedule for Implementation.
A schedule provides the ability to measure progress, estimate completion of critical steps, and project the end of the process. The schedule is also extremely useful for managing cash flow during this uncertain time.
9. Release Announcements & Notices.
This step is about timing and legal notice. At some point, interested parties must know what is happening: market, competitors, customers, vendors and suppliers, professional service providers, consultants, trade groups, employees, media, creditors, contractors. The notice should designate an official point of contact for questions or inquiries.
10. Implement the Plan.
This is where momentum and activity builds. Things happen very quickly. Without the planning steps, an important degree of control is lost. When that happens, net value is usually decreased in some substantial way.
11. Conclude or Transfer Contract Obligations.
This process may require approval from contracting parties, and involve negotiation of final terms. Office, car, and equipment leases need to be reviewed, addressed, and terminated. The timing of termination dates for insurance contracts and benefit plans are very important to all involved.
12. Close Operations.
The timing of this step is important. There is a time when manufacturing or production must cease, retail sales must end, and human resources are pared down. Each affect cash flow and net value dramatically. Security and maintenance services may be an important consideration from this point on.
13. Dispose of & Transfer Assets.
This is an important tax event. Insurance coverage can be reduced or eliminated.
14. Settle Accounts Payable & Debt Obligations.
15. Prepare Final Financial Statements & Tax Returns
Final financial statements for the business are important to establish the tax implications for assets, gains, and losses conveyed to the owners, or other involved parties.
16. File Articles of Dissolution.
State licensing departments require a formal filing to terminate the legal and tax status of the business. Examples are articles of dissolution, certificates of withdrawal, and cancellation certificates. This process also results in a review of tax liabilities, and issuance of a tax clearance notice or certificate.
17. Prepare & Issue Special Filings, Notices, Informational Returns, & Taxes.
To develop a checklist, retrace your steps taken during startup. Generally, some action is required with all federal and stage registration, taxing, and licensing agencies contacted to start the business. Final submittals of payroll, unemployment, industrial insurance, and other business tax returns must indicate that the business status is closed, or changed.
18. Receive Tax Clearance Notice.
File in financial records.
19. Close Bank Account.
20. Store Business Records
These records should be kept for at least seven years.
Planning and awareness are crucial. The process, timing of events, and tasks must be tailored to the type and complexity of the business. Each case is unique because reasons for dissolution differ, and problems that exist or develop are unique to the circumstance. Take a look at this checklist of items to consider as early in the process as possible. Most of these issues have some impact on the process of getting out of business.

For more information, please proceed http://www.smallbusinessnotes.com/managing-your-business/exit-strategies.html

Posted in International Business

If you are knee-deep in credit card debt and you desperately want to get out of debt, get help from credit card debt consolidation to eliminate your debt as fast as possible. Debts are always overwhelming. Credit card debt consolidation can help you regain the financial stability that you have been suffering from due to your outstanding credit card debts. This article provides you with information you need to know to rid of your credit card debts by consolidating them.

3 Ways To Consolidate Your Debts

If you are in deep trouble with creditor harassment, calling you constantly to pay them off and you need to consider credit card debt consolidation soon. Here are 3 ways to consolidate your credit card debts.

1. 0% interest credit card – Consolidate your all your credit card debts with the help of 0% interest or low interest credit card. After consolidating them, make double payments in order to ensure that you are paying off the principle of your credit card.

2. Approach your bank – You can get help from your bank or some other lender to consolidate your credit card debts. Your bank or lender may agree to offer you a low interest personal loan in order to pay off all the credit card debts. If you have a good credit, securing a low interest rate loan will not be a problem. Else you have to consider a loan with a high interest rate.

3. Home equity loan – You can also consolidate your credit card debts by taking out a low interest home equity loan or line of credit. This will help you take out a loan with a much lower interest rate and thus, affordable for you to pay it off.

3 Benefits of Consolidation

Here are 3 benefits of credit card consolidation.

1. Single monthly payment – With the help of credit consolidation you need to make a single monthly payment. Once you get help from a debt consolidation company you just need to make a single affordable payment each month for your outstanding debts.

2. Lower interest rate – Consolidating your credit cards may offer you a reduction on your interest rate. Thus, lowering your monthly payments and making it more affordable.

3. Debt free quickly – With the help of credit consolidation you may get rid of your debts as soon as possible. Debt consolidation reduces the amount of money you would have paid on your interest rate, simultaneously lowering your monthly payments. Thus assisting you to pay off easily and helping you to eliminate your debts quickly.

Considering credit card debt consolidation will also enable you to repair your credit report easily. With the help of debt consolidation you will gradually reduce your debts and ultimately eradicate all your debts one by one. After eliminating all your debts you may get more free time as you will spend less time worrying about money, debts, planning a budget and paying bills. Getting out of your credit card debt may also help you have more money to put into your future. Thus, helping you lead a stress-free life.

By Emily Jones

Posted in International Business