LLC Formation as LP Syndicator

[Sandra H.]

Does one typically form one LLC for all the syndications they invest in as an LP? Let's say they would like to take some of their savings from a bank account to invest as an LP syndicator, should they do so under an LLC entity? For tax purposes and asset protection reasons?

[Taylor L.]

I've seen several different setups. The decision typically comes down to the costs to form & maintain the LLCs and how much that will impact each LLC's net returns.

Most of the time syndications are structured so investors are investing in an LLC. Therefore, their liability as a passive investor is limited to their original investment.

Investors forming an LLC to passively invest into syndications will typically do so to protect their investments from their own liability, the goals being charging order protection and privacy.