No LLC For Each Property. A Little Tricky
I was doing a little thinking and wondering why this would not work if just looking for libility protection.
I have a few properties and getting ready to deed into land trusts with me as trustee and bene for the DOS clause on loans. Then I have a unrecorded seperate agreement transferring my bene rights to different LLC for each property. I understand this document is not recorded. Then I have a main LLC that will manage the property and the books for the seperate LLCs per an agreement.
So the tricky part. If I have 5 properties I would need 5 LLCs plus the main LLC. Why not just have the main and one other LLC. If sued you could only show the one agreement for that property so it looks like the sub LLC only has that one property.Would not need other 4 LLCs.
Just doing some thinking hear any comments
thanks
Normally, you would only want one LLC for each type of operation. One for land lording and one for flipping because the IRS will probably deem you a dealer, which you would not want to impact your other operations. Over and above that LLC's or S Corp or even C Corps at this level are used for one major reason. Protect all of your other assets if something goes wrong.
Jim Freeman
Thats a question for a RE attorney. My initial thoughts:
If you do not record the transfer of interest from you personally to the LLC, it is not binding in most states from what I understand. This leaves yourself still open to being sued, etc.
Why not put each property in a separate LLC? I have an attorney that charges me $25 to set up an additional LLC plus the filing fee because it only takes him a few minutes to take my old paperwork, change the name, and send it off to the secretary of state for me. When you can get the full benefit with little cost involved, why try to take shortcuts and possibly screw yourself?
I'd like to hear others opinions. I may be totally off on what I told you. Like I said I am not an attorney nor is this legal advice.
Yes I will actually use a seperate LLCs since they are cheap to set up. Was just interested if the above would of worked to help me learn more. But I did not know the transfer agreement had to be recorded in Va. Have been looking for most of the year for a attorney in my area who understands trust and LLCs (richmond,va.) Looking like I will need to research and educate current attorney.
Since we are talking about it. When you set up seperate LLC's, do you still have to get a new federal EIN number, and do you open an account with a bank for the LLC or do you just solely use it for protection?
Thanks,
The Solutions Kid
[addsig]
Not an expert. And there seems to be a number of opinions on this even with attorneys.
What you said would be the best for the most protection. I myself am trying to keep it simple for tax returns and bank accounts. I will have a main LLC with seperate tax ID and bank account. Then agreement with other LLCs that the main LLC has right to manage the books and bank account of the others. So dont have so many bank accounts and monthly fees.
Anybody eles have suggestions?