It’s been a long time issue that Robert Kiyosaki, author of several best seller books such as “Rich Dad, Poor Dad”, “Retire Young, Retire Rich,””Cashflow 101” and many more has filed corporate bankruptcy. Lately, this “bankruptcy” issue has been surfacing all over the internet.
So what really happened?
Rich Global LLC one of the company owned by Kiyosaki, was filed and declared bankrupt on August 20, 2012 in a Wyoming bankruptcy court. A lawsuit was filed against Kiyosaki’s Rich Global LLC by Learning Annex, one of Kiyosaki’s promoter in his public speaking events.
According to Learning Annex, Rich Global LLC allegedly failed to pay a percentage of profits from Kiyosaki’s speaking engagements and promotions. Rich Global LLC’s liabilities are nearly $26 million with assets of $1.8 million, according to its bankruptcy filing. Its biggest creditor is the Learning Annex due to its $23.7 million legal claim granted by a district judge in New York.(Source: abc News)
Kiyosaki also has another company which is the Rich Dad Co. and according to its CEO, Mike Sullivan, “The dealings we had with Learning Annex were with a company that hasn’t been in business for a number of years . . . I am not surprised Learning Annex is upset and angry, the money doesn’t exist in that company, and we can’t bring money out of the group.(Source: abc News)
“Robert and [wife] Kim are not paying out of personal assets. We have a few million dollars in this company, but not 16 or 20. I can’t do anything about a $20 million judgment . . . We got hit for what we think is a completely outlandish figure.”(Source: abc News)
With the said amount being owed by Rich Global LLC to Learning Annex, and considering the company’s net worth, Kiyosaki decided to file for Chapter 7 corporate bankruptcy, where the end result is the dissolution of the corporation’s entity(US-based law). Since it is a corporation, Kiyosaki’s personal assets are protected.
To make things clear, let us know first what is Corporation all about. According to businesscoachphil.com, a corporation is considered a separate entity; an artificial person created by law and, like partnerships, is registered in the Securities and Exchange Commission.
Most businessmen said that building corporations is the biggest secret of the rich. In fact, the biggest, richest and most prominent companies in the world are corporations. One of the advantages of a corporation type of business is that “Owners have limited Liability”. Owners of corporation or shareholders are only indebted to the extent of their interest in the corporation. This means that their creditors can only run after the assets of the corporation and not on the personal assets of the stockholders for the settlement of the corporation’s debts or liabilities. (Source:businesstips.ph)
I believe it was a good and smart business move for Robert Kiyosaki that time. If the business is bleeding, then you have to cut the losses. And for starters in business, it would be a good option if you will register your business as a corporation for this will shield you from lot of things, especially your personal assets.
Know more about corporation and business stuffs this coming November 30, 2015 at the National Achievers 2015 Congress where gread leaders in the international financial industry will be on one stage. BUY YOUR TICKETS NOW!
For more information and ticket inquiries for the National Achievers 2015 Congress, Masters of Wealth: Robert Kiyosaki Live In Manila, please call (02) 689-7194, 0922-8908880, and 0917-5996875, or you may buy your tickets online via http://richdadphilippines.com/events