Starting LLC w/ a Partner

[Casey Kooiman]

Good morning from WI!

I currently own a few investment properties myself. I'm interested in partnering with a friend to purchase some properties that way though... but I'm a bit stuck on the LLC. I have two main questions:

1) LLC Creation - I've created two LLCs for myself online which was pretty easy (in WI)... but what option do I need to select if I have a partner? Article 5 asks if management should be vested in "a manager or managers" or "its members". I assume "its members", but it doesn't seem to be much different when adding a partner. Am I missing anything from an incorporation standpoint?

2) Bank Account - So my friend and I need $40k for an upcoming deal. I assume we can't just transfer $20k each into the account. Does the LLC need to accept it as a loan or gift or something else so we don't "pierce the veil"? How do we pull money out if we need it? Would we just essentially pay back the loan?

Thanks, everyone! I've already learned SO much from BP, and I wouldn't be where I am without you all!

[Jacob Sampson]

1. I would reach out to something like legalzoom.com and just get the LLC setup appropriately. They will know the best way.

2. You can both deposit money into the LLC account. In your accounting software you will setup a capitol account for each owner and those deposits will be placed in those capitol accounts. But, I would suggest you reach out to an accountant to set this stuff up correctly. It will be a couple hundred bucks and well worth it.

These aren't the areas to try and save money on.  When all is said and done they won't cost that much and it's well worth doing them right the first time.