Posted by JHyre in Ohio on November 12, 2002 at 11:26:41:
An LLC’s liability protection aspects are more likely to be upheld where multiple members are involved. The clearer and better defined the roles (e.g. - the operating agreement), and the more “businesslike” the arrangement, the better.
John Hyre
LLC question for John Hyre - Posted by Wade P
Posted by Wade P on November 11, 2002 at 12:12:25:
John,
I am going to be setting up an LLC to house my first few R.E. purchases. My question is this, I understand that there must be at least two shareholders or partners that operate the LLC. Should I name my wife as the other partner, or my father who will be involved with buying and selling with me as well, or someone else?
I have heard horror stories of people that have not set up their LLC’s corrrectly and have paid a heavy price. I would appreciate any advise you could provide!
Re: LLC question for John Hyre - Posted by KC Questions
Posted by KC Questions on November 11, 2002 at 15:17:30:
Where did you hear that there must be at least two shareholders or partners to operate the LLC?
What state are you in?
Will your wife or father have any roles in the company, or will you be doing everything?
Re: LLC question for John Hyre - Posted by Wade P
Posted by Wade P on November 11, 2002 at 16:29:12:
My wife will be involved quite extensively and my father will be involved somewhat.
To answer your question, I am located in Utah, but I have heard where individual’s creating an LLC for this purpose (buying and selling property) have been found liable by Judges more and more because they were the only person in the LLC. The court system is clamping down on people that organize their business incorrectly, then expect their assets to be protected from the system. I prefer to collect solid and correct advice so this does not happen to me.
Re: LLC question for John Hyre - Posted by Terry (Houston)
Posted by Terry (Houston) on November 14, 2002 at 07:22:30:
Wouldn’t any business that is run incorrectly or set up wrong be clamped down on? Think Enron.
Most of the guys here strongly suggest you run it right from the beginning.
Terry (Houston)