Sole member LLC, add spouse as LLC member

[GERT S.]

I went to cheap way, and formed an LLC (Florida) online without speaking to an attorney first. I know, fools rush in where angels fear to tread.

My LLC just acquired 2 condos that need a little rehab. After rehab, the condos will be rented out. This is the only business the LLC has ever done.

I am married. When I set up the LLC, I made myself the sole member, because I thought that that would give us better protection. But I was wrong.

www,alperlaw.com says: "Under current Florida law a debtor’s interest in a single member LLC provides little asset protection benefits. New LLCs designed for asset protection should include a least two members, and existing LLCs should add at least one member to restrict creditor’s rights to charging liens."

So now, I think I should add my wife as a member to the LLC asap!

Can I just go ahead and add her as a member? Will there be complications? Should I be concerned about Property Tax Reassessment or anything else? 

Any advice will be greatly appreciated.

Thanks,

Gert

[Cameron Skinner]

That's not true single-member LLCs do give you an added level of protection over just owning a property in your own name. There was a recent court case called Olmsted where a single member LLC was broken by the court because he was not treating it like a business. Because the court said it was just an alter ego of the owner. If you read the case he was running his own personal expenses through the so-called LLC. After that the Florida legislature firmed up the statute that says multi members charging lien is only recourse againts multimember worried that court decision might have business flee the state. So multi member is better. In Florida you don't have to disclose the members to the Florida Department of corporations only the manager or managing member. I'm actually manager of a few LLCs which I have no ownership interest in. And I'm the only one reported on the Department of corporations website. You can just add her as a member to Organizational Agreement. What you filed online was the articles of organization. But you still need an organizational agreement which there are several examples online and is private and not reported to anyone.

As long as it's just you and your wife and you file a joint return you can still treat as a disregarded entity for federal tax purposes