Articles for Establishing an LLC for Real Estate + Investment

[Jonathan Roveto]

Hi all,

I'm preparing to file Articles of Incorporation for an LLC in GA for my rental properties. I plan on putting the properties under the LLC via quit claim (I've talked to my lenders, who have OKed this). I also plan on doing other investments (equity/debt securities and currency investments) with the LLC's money, so there is that consideration. Are there any specific articles that I should consider putting in the LLC's Articles of Incorporation if I am going to be the only person in the LLC? I assume it's more complicated if multiple people are in it, but does anyone have any suggestions for single-person LLCs? Or should I just incorporate stating that the LLC is meant for the management of real estate and supplemental investment activities?

[Jon Pitcher]

@Jeff B., @Surender Singh

These generalizations about LLCs are not accurate in all jurisdictions.  Statutes and case law regarding LLCs are state-specific, and what is true for you in California or Florida could be completely wrong for the original poster in Georgia - he should talk to an attorney in his state.

In both of the jurisdictions in which I am licensed (Texas and Oklahoma), state law says the exclusive remedy for an LLC member's judgment creditor is a charging order. The statutes do not limit this protection to multi-member LLCs. I cannot find a case in either Oklahoma or Texas where the court has pierced an LLC because the LLC had only one member (if anyone knows of one, please post or send it to me).

This link suggests the same may be true in Georgia:  http://www.nolo.com/legal-encyclopedia/llc-protect...

An LLC does need its own separate funds, and it needs to keep company records in compliance with its operating agreement and state law. But in my two states, an LLC is not required to hold annual meetings, or even have a board. So that would be a very odd reason for a court to pierce the structure.

The LLC is not right for every situation, and a multi-member LLC is preferable to a single-member LLC for asset protection. But the single-member LLC can be a useful tool in some jurisdictions, and should not be dismissed without understanding the applicable state law.