LLC in Philadelphia PA

[Nathan J.]

Hi there, 

I am sure this is old hat to many of you. Would love to understand important points in setting up an LLC in Philly. My goal is purely to protect my personal assets from lawsuits that may occur with rental properties that i have in Philly.

1) Is there an advantage to setting up the LLC in Pennsylvania vs another state?
2) Is it important to set up an operating agreement for the LLC. Who does that?
3) Does the LLC need to have separate bank accounts. Or can it pass through to my accounts.
4) Given the goal is to protect my personal assets, i would put multiple properties into one LLC. Is that sensible?

Thank you in advance 

[Percy N.]

@Nathan J., for a few hundred $, there are many online resources who will create a LLC for you. They will typically also provide an Operating Agreement and EIN (Federal tax number). I am assuming this LLC is not being formed from funds from a Self Directed IRA, which requires a special Operating Agreement and there are specialist for this.

There are pros and cons of incorporating in PA. If your entity is registered outside PA (e.g. Delaware), it may be required to pay taxes in PA.

I will also point out that if you plan to purchase properties in the name of the LLC, then hope these are cash purchases or you have secured financing for the LLC, which is typically more of a challenge than personal financing.

Consult your lawyer and accountant for the best option for you.