LP or LLLP and what state?

[Dan R.]

I live in Georgia and want to set up a parent LP/LLLP out of state because in GA an entity that owns LLCs organized in GA does not have to register here(and you do not have to disclose the owner of an LLC in GA on public filings).

What state should I organize the LP/LLLP in? I would like a state that does not allow foreclosures of interest? I originally planned on using Delaware but I am also looking into Alaska, Nevada, and Wyoming.

My Plan is:
Out of state LP/LLLP owns multiple LLCs in GA that will be used to purchase the investments properties in GA.

Then I will set up four trusts to own the interest. (one for me as GP, one for me as LP, one for my daughter LP, and one for my son LP.) Or should I set up a LLC as GP? Is it necessary in a LP/LLLP if it is only owning LLCs and no actual properties/investments?

By the way I have flipped 31 houses in the past six years so I am not new to flipping but the the business structure. I previously used one LLC to do it.

And I will have an attorney do my paper work.

[Bill Gulley]

Welcome to BP, Dan! Interesting, but are you an accountant, if not you'll be making one happy consolidating the books.

As to foreclosing on any interest, not sure what you mean, but all states have either a judical or non-judicial process for foreclosures.

IMO, hiding out from the public just isn't worth the trouble and is really part of an "attorney guru" plan that generates alot of needless entities requiring legal assistance. If you have any issue, you usually won't be able to represent these entities. In RE, the very best liability protection comes from tons of insurance and liability coverage is rather cheap.

I have to admit, when LLCs became available I started one (the first in Mo. according to the Sec of State as it was filed the morning after the law was passed, they had no forms or instructions....but that's another story). Later I had multiple LLCs,but they were all due to different business interests and activities related to finance or RE. It was a real pain managing them in concert. My CPA must have loved it, and I have an accounting background. There is a tendency I think that we want to form various entities in building our little empires and it's totally unnecessary.

As to your trusts, you can put a trust in an LLC or the other way around. Not knowing anything about your goals, personal situation or financials, can't say which avenue to take. This becomes an estate planning issue or could and beyound the scope of my advice here or this site (there are a few attroneys here that may address this). The type of trust will also be an issue.

I suggest you re-think your strategy as to the business effectiveness of all this and use insurance for any liability issue. Your liability exposure is rather low flipping except for construction aspects, IMO.

We can certainly proceed with thoughts on the matter but much more information would be required, as to the purpose and goals desired.

Good luck...