Is LLC really neccesary

[Bill W]

to do a one house flip. Three of us are wanting to put = amount of money to buy and rehab a house then flip it. Profit to be split evenly. We are paying cash no loans. LLC seems cumbersome, cpa says it has to be registered with State, dept of revenue, and unemployment office.

[Andy J.]

Charles makes a great point here. One of the most important reasons to form an LLC (properly with a good operating agreement) is how the company and its members/managers runs.

What happens when things go wrong and you have to bring more money to the table, what if one of you is broke and can't contribute? What happens when one of your partners wants out, how much money, if any, do they get? Who has the right to execute contracts? What if you all disagree on how much to list the house for, or what offer to accept? What happens if one of you dies, do their next of kin receive ownership of their share, controlling ownership, can you buy them out, at what price?

When everything is peaches and cream it's easy to be partners. When the $#!* hits the fan its a lot cheaper to refer to your operating agreement than to each hire lawyers and pay them $300 an hour to talk to each other while you sit in the corner regretting not hashing out details up front.