LLC versus Liability Insurance? - Posted by Jen (NE)

Posted by raelynn mitchell on November 26, 1998 at 02:04:29:

just liability protection. Although they are a GREAT tool for that, as well.

Having a corporation can be just like having another Social Security Number but legally. And as such, it can obtain credit that is separate from your personal credit, often for larger limits than for individual accounts, even from the same institution.

And you can legally control as many corporations as you like (although it can make your life complicated once you have “a lot” of them).

Take out the credit cards in your wallet. Contact each of those companies and ask them if they have a corporate account. The answer will sometimes surprise you. It’s true; even Nordstroms and Bloomingdales have corporate accounts. Not to mention Sears, Sam’s Club, JCPenneys, Target, Chevron, Texaco, Home Depot, Home Base, Office Depot, Staples and Office Max. This list is NOT all-inclusive; just ask.

True, you can’t hand someone cash you just received from your corporate Home Depot card. Or can you? (They have gift certificates, or you can perhaps offer the seller of that property something he can use instead of cash, then make minimum or higher monthly payments.) (And yes, you can charge gift certificates to the card. And yes, when you spend them, they hand you cash back for the change–sometimes–depending on merchant policy, which varies from company to company.)

Just food for thought.


LLC versus Liability Insurance? - Posted by Jen (NE)

Posted by Jen (NE) on November 25, 1998 at 13:34:05:

I faxed my RE atty some of Bronchick’s articles. He told me that if I have adequate liability insurance, that I don’t need an LLC to protect myself. He said the fees with Corps or LLCs are fairly expense compared to homeowners insurance. He also said that if I manage the rentals myself, that I defeat the purpose of remaining anonymous anyways (which I agree but am trying to save money).

Does anyone have an opinion on his statement of LLC vs Liability Insurance. Thanks for all your help in advance!!

Jen, there is a difference… - Posted by Soapymac

Posted by Soapymac on November 25, 1998 at 19:05:58:

from a liability point of view between yourself “doing business as” and an LLC.

From a strict liability point of view…and I leave myself open to correction here…the more you can insulate yourself from being personally liable, the better. Talk with a good insurance broker who knows you and what you are trying to accomplish.

With respect to your attorney’s thoughts on anonimity(sp?), by having an LLC…you could blame anything you really don’t want to handle on “them” – the corporation. If they make a suggestion that you don’t like, say “the corporation won’t let me do that for you.”

As far as your tenants are concerned, tell them that the corporation made you an offer you couldn’t refuse…and they asked you to stay on because you knew them and the properties so well.

Say anything you want, really, because putting the insulating factors of an LLC between you and them will protect YOU.

My only personal comment here is that it is a shame that we have to protect ourselves like this because we are in such a litigious society.