Posted by Rich-CA on March 21, 2008 at 22:38:16:
The answer is “maybe”, depending on how the LLC is organized. If its a single member LLC and is basically a pass through entity, it may be easier to get through to you than something owned by a 3rd party managing on your behalf or something with several members.
Limited Liability for Brokerage Firms - Posted by robert
Posted by robert on March 21, 2008 at 18:05:29:
I plan on transferring my current stock brokerage account into an LLC. The reason for doing this is to limit my personal exposure in the event I experience a huge loss by short selling, which you can lose your entire account value and be personally liable. The LLC member will sign all the agreements. The brokerage doesn’t require a personal guarantee agreement. My question is, will the LLC limit my personal liability?
Thanks Bill.
Re: Limited Liability for Brokerage Firms - Posted by Alan
Posted by Alan on August 06, 2008 at 18:59:55:
So, if I have a single property (that I’m anticipating having major problems making payments and can’t sell the thing) placing it in an S Corp or LLC won’t protect my personal assets if the property is foreclosed?
Re: Limited Liability for Brokerage Firms - Posted by robert
Posted by robert on March 26, 2008 at 06:33:08:
thank you bill and rich for your comments.
Re: Limited Liability for Brokerage Firms - Posted by Bill H
Posted by Bill H on March 22, 2008 at 08:11:14:
I agree with Rich-CA…the answer is a BIG maybe. The recent Colorado case was almost the same scenario you posted. It was a single member LLC, their sole intent and purpose was to protect them like you describe. No one else involved…judge said NO WAY Jose…pierced the corporate veil and they lost the case.
3rd party, more than one member, all like Rich said MIGHT offer more protection.
Looks like what you are trying to do is profit with NO RISK and that is not exactly Kosher. The courts have what is called the “Clean Hands Principle” and in this case your hands are not clean.
Good Luck,
Bill H