What steps should I take to protect my personal assets as a sole proprietor in California?

As a sole proprietor in California, there are several steps you can take to protect your personal assets:

1. Consider forming a limited liability company (LLC). This will provide you with personal asset protection, as your personal assets will be separate from your business assets. If your business is sued, your personal assets will not be at risk.
2. Obtain sufficient insurance coverage. Liability insurance can provide additional protection in case of a lawsuit against your business. Speak to an insurance agent to obtain general liability insurance, professional liability insurance, or other types of insurance that may apply to your business.
3. Keep thorough and accurate records. Maintaining organized and detailed records of your business will help to protect your personal assets in case of tax or legal disputes.
4. Use contracts in all business transactions. Whenever you enter into a business transaction with a customer, supplier, or other business, use a written contract to outline the terms of the agreement. This can help to protect your business and personal assets in case of a dispute.

It is important to note that there may be limitations or exceptions to these steps, and additional action may be necessary. For example, forming an LLC does not protect you from personal liability for your own wrongful actions or negligence. Additionally, specific regulations or laws may apply to your particular business, which could impact the protective measures you need to take.

To ensure that you are taking all necessary steps to protect your personal assets, it is recommended that you consult with a licensed attorney who specializes in small business law. They can provide you with personalized legal advice based on your specific circumstances and business needs.