Posted by swwa on March 24, 2003 at 14:21:55:
archives (duh)
http://www.creonline.com/legal/wwwboard7/messages/5911.html
and here
Does it cost more to operate an LLC with 2 owners? - Posted by Matt in NJ
Posted by Matt in NJ on March 19, 2003 at 09:32:40:
Does it cost more to setup and/or operate an LLC with 2 owners as opposed to 1? If so, how much of a difference and why?
He!! Yes - Posted by JHyre in Ohio
Posted by JHyre in Ohio on March 19, 2003 at 13:09:49:
Yes, it costs more, unless one owner is your spouse. By far the largest expense is the time spent negotiating and drafting an operating agreement. You have to explore and agree on numerous contingencies…who gets paid? How much? When? What if you disagree on an issue? How and when does the company wind up?
These issues need to be carefully examined and expressed in writing, clearly and in detail. An agreement that fails to act as a roadmap is worthless. While you are getting along with the other owner, you deal with these issues…so that when you stop getting along, the agreement says what happens. Crafting such an agreement takes time and begs for attorney review and involvement…which isn’t cheap.
A good resource to educate yourself: The Partnership Book, at www.nolo.com for $40.
Another minor expense: Filing a partnership return (what most 2+ member LLC’s file) is more expensive than a normal 1040…but is also less likely to be audited.
John Hyre
Re: He!! Yes - Posted by Steve-WA
Posted by Steve-WA on March 22, 2003 at 22:33:33:
OK, John, so how about this - married couple forms an LLC for holding rental property. In your opinion is it best to set it up:
(a) 50/50 with each spouse as a member
(b) single member llc with other spouse as a manager
(c) other
I understand that the IRS ignores single member llc’s (pass-through), so would this be the best way to go? Your comment in the ‘He!! yes’ post mentions - “unless one owner is your spouse”
Short and sweet, and fee-free (!), what would your recommendation be?