Setting up a corporate entity

[Dennis Griffith]

I currently have one rental property, which is in my name. I have been inquiring about transferring ownership to corporate entity in order to protect my assets. The rental property is in North Carolina and I have been advised by an online service to transfer it to a North Carolina LLC and then create a Wyoming LLC which will act as a holding company for the North Carolina LLC. Can anyone shed some light on the situation or advise on whether this would be a good move?

[Jerry W.]

@Dennis Griffith just a few thoughts from an attorney in Wyoming. First do you manage the property you own yourself? If so setting up multiple entities to own it is of little use anything you do personally can create a lawsuit that will bypass all of your entities. If you have a property manager a single layer of LLC protection will probably be sufficient. You also have to keep in mind that running that many entities for a single property will probably kill any chance of profit. You have to 2 sets of annual minutes, 2 sets of books, 2 bank accounts, 2 tax returns, 2 annual license fees, two registered agents, etc. Get the idea? Another thing to consider is what is your net worth. if you are worth $100K then just get good insurance, and lots of it. If you are worth a million dollars then set up an entity. There are a lot of factors to consider. For now you might just get a North Carolina LLC and run everything through that. I would suggest you talk to an accountant and your banker on tax issues and if the bank won't call your loan if you transfer title. I would also suggest reading up on how to properly manage your LLC so you do not get the corporate veil pierced if someone files a lawsuit. I hope this helps a little. I know it is very vague, but there is a lot that I am simplifying.