Attorney · Austin, TX · Member since 2014 · 1k+ posts · 932 votes
I'm the asset protection attorney out of Austin, Texas that protects real estate investors from lawsuits. What I want to know is the question you have about lawsuit protection, taxes, insurance, financing, etc. as it relates to owning property in a company.
I have a LLC in Nevada however my properties are in MO and IL(bought in the Nevada LLC name as well). I dont want to setup foreign entity in MO and IL(which I didnt know I had to do before purchasing the properties if I knew I would have setup and purchased in MO and IL LLC name) rather I want to dissolve my Nevada entity and create a new one in MO and IL. I believe we can do a merger which can automatically dissolve Nevada entity however I dont want to do that either due to costs
Should I just do a quit claim deed and move the title from Nevada LLC to MO and IL LLCs and then pay the necessary fees and dissolve Nevada LLC? Would this be sufficient? Am I missing anything here?
I apologize for not responding earlier, I am working through to update my notifications and start tracking these posts more consistently.
You can hold the MO and IL properties *in land trusts* inside of the Nevada LLC and you wont have to file as a foreign entity in MO or IL. A LLC formed in one state may be utilized in other states without the need for a Foreign Registration. By utilizing the Land Trust to own the individual properties, the LLC is not doing business within the foreign state in which the property is located. Instead, the Land Trust owns the property and therefore a Foreign Registration is not required. This saves on administrative costs relating to filing a Foreign Registration, including the filing fee and the annual registered agent fee.
As a side note I would also say that the amount your properties are worth play into what entity you use. If you file them both into the same LLC, then if there is a judgment against either they will both be at risk. If you were to dissolve the Nevada LLC and form a Series LLC, then you could house both those properties under the same"parent" LLC as separate "child" series that would separate liability. The Series LLC is also a great tool because you are still working from a single EIN and can use a single bank account to operate those properties with the correct bookkeeping.
I am assuming this post came too late, but I hope it offers ideas that you can look into.
...form a Series LLC, then you could house both those properties under the same"parent" LLC as separate "child" series that would separate liability. The Series LLC is also a great tool because you are still working from a single EIN and can use a single bank account to operate those properties with the correct bookkeeping.
Why have I been told by several different attorneys and NOLO that each llc "child" needs its own EIN and checking account? NOLO says, "To maintain the liability protection of each series it is important to treat each series as a separate company. This includes having a separate bank account, maintaining separate books and records, signing contracts using the name of the series" from https://www.nolo.com/legal-encyclopedia/what-is-series-llc.html
The purpose of setting up the separate bank accounts is to prevent commingling and provide proof that each entity is operating separately. The reason so many people recommend that operating separate bank accounts is important, sometimes demanded, is that you are keeping your books separate - proving that they are separate entities from one another.
The reason I recommend my clients actually keep a single bank account is that current software makes it much easier to track your money, and you can earmark and split your finances to track with clarity. At this point you can actually use your bank statements to prove that you are operating these different "child" series separate from one another. You don't have multiple bank accounts, which causes the most commingling issues in my experience! The struggle of working with multiple bank accounts is that you have to keep straight which account goes to which property, and which contractor gets paid by that account. The chances that you end up mixing those accounts is quite high, especially as you add more "child" series. If you have all of those finances stored in a single account that is clearly marked, the chance of commingling goes down because you are simplifying the task and removing variables that can cause error.
Thank you so much Scott. Appreciate all the inputs. Do you know who can help support to form a land trust? and how much does it cost? Also can we have series LLC in one state but have child series in different states?