The LLC seems to be much more popular now than a Corp. I normally have an LLC in each state where I do business that is formed in that state. The property owners are trusts but the operating company is the local LLC. The parent LLC is formed in a state where I intend to move in a couple of years. I had originally started it in NV, which is when I discovered the entire “incorporate in Nevada” campaign is just a scam. And it costs $200 per year to file annual reports there, even if nothing changes.
costs (NV is a LOT more expensive both to set up and keep active) and the case law (CO had some recent court case that basically made the single member LLC into a partnership by stating that the person and the company are the same thing. Personally I use the state where I have business operations because that is the state where you are most likely to be sued and the lawsuit will be carried out under the laws of the state where its files, NOT the state where the LLC is formed. Keep a large enough liability policy that the insurance company won’t just settle.
Re: The primary differences are the - Posted by Walt Carey
Posted by Walt Carey on July 06, 2008 at 18:00:02:
Rich,
Actually, the choice of law particulars usually don’t revolve around where a business incorporates, but rather where the contract was signed, tort occurred, etc. or, if the parties so choose, the laws of a particular jursidiction are recited in the contract.
I was told to set up a land trust for every property I have and then put the land trust under the umbrella of the LLC. The LLC would not have to be in the State my properties are located. I am making sure so that I don’t well protected from all different angles.
As I mentioned, I just note it for discussion if I have the need. Not being a lawyer, I do not remember citations. Even had trouble with remembering the few that came up during my MBA program. So I mentally note the subject matter figuring I can always find it if I really need to. Or pay someone else to locate it.
I think it was Schaub’s newsletter, but I do not recall. I merely noted it for future reference and figured to bring it up should I need to converse with an attorney. I almost never write down citations because I am not a lawyer. What I do with the info is mention it to a lawyer when I need one and they will almost always know the details.
incorporation industry is a scam. However if they need a charging order to attach assets in order to satisfy the judgment, do they have to go to the owner’s jurisdiction (at least the same state)? Otherwise, exactly what “protection” does a NV LLC or Corp offer someone doing business in, say, TX?
protection through concealment. A trust will not actually protect you in case of a lawsuit. Both NV and CO publish who owns their LLCs, which makes concealment difficult, though if your LLC is created by another LLC or other 3rd party in CO, that is the only name you can turn up using a web search, whereas in NV it is required you provide a real name. Other locations you might want to look at are Wyoming, which does not require publishing the ownership to the world.
Re: That’s why I concluded the NV - Posted by Walt Carey
Posted by Walt Carey on July 07, 2008 at 06:39:43:
I agree, for businesses such as those formed by a REI, incorporating in your home state makes perfect sense. That, combined with the fact that foreign corporations have a much higher rate of being audited makes such a choice puzzling.