Single Member LLC For Liability Protection?
I have my 13 rentals in my personal name. Have a large commercial umbrella policy with State Farm, most have hazard insurance with State Farm, and I have a Line of Credit (LOC) on most. Thinking about possibly moving them into an LLC for liability protection. Am looking at buying a new business and want to get a bit more protection.
Insurance - I believe that State Farm would allow me to keep the commercial umbrella and hazard insurances if I formed a single member LLC. What are the libility protection disadvantages of a single member LLC?
LOC - I doublt that the LOC lender would even notice if I deeded the properties to an LLC - but it is not a risk that I can afford to take. Guess I could go to each bank and ask if they would go a new LOC and only do a double close to the new LLC. Any thoughts or ideas on this?
Using a SMLLC to hold properties you manage yourself provides no more liability protection than the insurance policies you have already purchased.
So if I wanted to ditch the insurances (which is not likely in FL), how would be the required set up of the LLC to offer more protection. And yes, I do self manage my rentals. But I think that most apartment complexes self manage their rentals also.
he and she are attys.
There is a ton of information on the web and I had done some research in the past but had forgotten most of it.
How does a single person find someone to be a member of their LLC. And how can you restrict their ability to cause you financial harm.
http://www.toolkit.com/small_business_guide/sbg.aspx?nid=P12_4476
How does being an "employee" of your single member LLC (by managing the properties), (and then you might argue that your an independent contractor) somehow pierce the corporate veil?
ddipaola,
It has been ten days now since you said you were meeting with attornies. What was the outcome?
New Kid,
Sorry about that...my wife and I had our third child on Saturday 2/23 and I am losing the battle with my other 2 kids......... but I spoke to a lawyer who handles deeds and titles last week. His opinion that for a residential 2 family in a single member llc just get an umbrella policy since I am taking my wife off of the deed of the 2 family and I am not on the one family title. I have a phone interview with an estate planner at the end of this week for not just the properties and this is my first question.
Everything got pushed back a week sorry about that.
I also still dont understand how anyone who is not married, no partner or anyone they trust enough can have anything other than a single member LLC. Who would the other member(s) be? Also does a single or multi member LLC make any difference with taxes when it only owns rental property? Does that change when there is active income?
Wait a minute, If all you want to do is form an LLC there are much cheaper alternatives.
Nolo press has a pretty good book on the subject for under $50.
A local attorney will probably do all the paperwork for you for less than $500, (heck, my accountant does it as an accommodation because I have him do the tax returns). The SBA has a pretty good course and there approximately 7 million web sites full of free advice.