Protecting Your Personal Assets

[Roy Vereen]

Hello BP,

I am a newbie from Columbia, Md. I am in the process of creating a LLC to protect my personal assets from my investment assets. Question, once this is done will lenders check the credit score and finances of my company or the members of the company?

[Alexander Merritt]

@Roy Vereen

Just search for this on BP. This has been discussed on here at length probably hundreds of times. It's basically a trade off between asset protection vs easy of financing. A lot of BP'ers will tell you that LLC's when you first start off aren't worth the hasle if you are a single investment and don't actually provide you with any real Asset Protection because any compentent lawyer will be able to "pierce the corporate veil" and then you will be personally liable for any lawsuits that result from your business. I don't necessiarly agree with that because LLCs were designed to give you that protection provided you run the LLC exactly to the letter of the law.

As @Brandon Hall mentioned, having and LLC will make it more difficult and expensive to get financing because the LLC has no real assets to go after in case of default or bankruptcy.