Multiple LLC - Property Holding and Management Company

[Kent Julian]

I currently have 3 rental properties. I worked with an attorney to set up two LLCs. 

The first LLC is a "holding" LLC. This LLC owns the properties. I plan to place 4-5 properties into this LLC and will then create other holding LLCs for each additional set of 4-5 properties I purchase.

The second LLC is a "management" LLC. I use a professional Property Management Company to manage our properties (which I love), so my management LLC exists to simply handle all business and funds. I set this up primarily so that I didn't need to set up separate bank accounts in the future for each holding LLC I create. I want to be able to run all my rental property business through one bank account.

However, my lawyer and CPA are not in agreement as to which LLC should sign the W-9 with the professional Property Management Company that I work with. My CPA thinks the holding LLC should sign the W-9 and my lawyer thinks the management LLC should sign the W-9.

I wanted this to be simple. Now I'm really confused. Help!  

[Rob Beland]

Well thankfully for your lawyer and your accountant you have now created such a complex corporate structure that your closest trusted advisors can't even figure out how to balance a checkbook. I hope you aren't paying them by the hour to argue back and forth about this @Kent Julian

A couple questions... Do you have an outside company that manages your properties? You mentioned a "management LLC" and you also mentioned a professional property management company. If you are hiring a management company to manage your properties why do you need a separate entity to be a management llc?

It really doesn't matter how many properties you own. You could own 549 properties and use one checkbook. You now only have one account to worry about. What makes you think you need all these entities and bank accounts? I'm guessing your accountant and your attorney but these are the two people that can't figure out who signs a W-9. 

If you want it to be simple, fire your accountant and your attorney. Open one checking account. Have your PM collect the rents and deposit them in the bank. Every month pay your bills. Pay your PM company every month. BOOM!