Buisness Protection - Posted by Chuck

Posted by Bob Smith on March 01, 2011 at 03:44:01:

Why not SMLLCs filing taxes as an S-Corporation? It’s easy to do.

Buisness Protection - Posted by Chuck

Posted by Chuck on February 04, 2011 at 11:37:09:

Newbe just starting out. Want to protect my personal name,credit,and finances.
Should I pursue getting an LLC or some other, and what is a ballpark figure cost for doing so?
This site is AWESOME.

And… - Posted by William Bronchick

Posted by William Bronchick on February 09, 2011 at 16:43:27:

If you wholesale the property to another investor, the
deed restriction stays with it - so that investor cannot
resell for 90 days either.

Re: Buisness Protection - Posted by William Bronchick

Posted by William Bronchick on February 09, 2011 at 16:40:40:

I’d say 90% of beginning investors make the mistake of
filing a single member LLC instead of an S corp. A
single member LLC has no asset protection and reports
on a schedule C, a highly audited return. Instead,
consider an S corporation, particularly if you are
flipping. If you are holding rentals, then an LLC or
two is more likely the way to go.

Re: And… - Posted by Chuck

Posted by Chuck on February 11, 2011 at 11:29:21:

Thanks Bill,
Are “S” corps expensive and how would I go about getting one. Where to go. Who to talk to.
Thank you so much.
I think this is the year that I finally get this thing off the ground.
Chuck

Caveat: LLC can be obstacle - Posted by John Merchant

Posted by John Merchant on February 10, 2011 at 15:20:25:

While Bronchik and I agree on a lot of things this isn’t necessarily one of them.

e.g. SMLLC has “no asset protection” can be a misleading and overly-broad statement, and early knowledge in a lawsuit that the D’s only valuable properties are in an LLC (might not be able to see upfront how many members it has) can cause an experienced Plaintiff’s lawyer looking to sue that entity or its owner to shy away from getting heavily, expensively involved.

I’ve personally been involved in lawsuits where this revelation caused an otherwise meritorious lawsuit to be dismissed…just too time and legal fee-intensive for the client to be willing to pay for.

Before getting involved with a partner or JV investor or debtor it’d be worth spending a few bucks to see how he/she holds title to his present properties and I’d be turned off quickly if I discovered that person has been extremely cagey in how he’s holding his titles.

I’d agree with B that I’d not want to rely on such if I were trying to protect myself against possible future tort liability as LLC can be and has been penetrated here and there. Some states are inclined to penetrate and/or ignore a SMLLC while others look on them as being armor to that entity’s owner.

All readers should understand that how you or I might report on Sched C is NOT discoverable by an outsider wanting to sue us until and unless he first gets final court Judgment against us…and B and I’d likely agree that we wouldn’t want to go very far in a time-intensive attack on such an LLC before we knew more facts about that LLC, what it owns and owes, etc.

Re: And… - Posted by William Bronchick

Posted by William Bronchick on February 11, 2011 at 12:35:05:

No more expensive than LLC. I would Google for a local
attorney who charges a reasonable fee. $600 + filing
costs is about right.

Re: Caveat: LLC can be obstacle - Posted by William Bronchick

Posted by William Bronchick on February 10, 2011 at 15:30:29:

I kind of had a feeling after I wrote that there’d be
confusion. It has LAWSUIT protection, not ASSET
protection. Thus, a SMLLC will protect you from
outside lawsuits against the company, but not against
judgments trying to attach your interest in the LLC.

I don’t like SMLLCs where the single member is an
individual because of the schedule C reporting. A
SMLLC where the sole member is a multi-member LLC is
recommended.