Dumb question:Who am I looking for? Accountant or legal services?

Question

Hey guys,

Sorry for a dumb question.

I am not sure who am I looking for, an accountant or paralegal?

I need to make sure I am not doing anything that will pierce the corporate veil and put my LLC and other assets in jeopardy.

For instance, I need somebody who can tell me if I am doing funds co-mingling or not. Making sure my LLCs do things properly, And in general, I need some guidance.

Do I need and accountant? Or paralegal? Or attorney?

I do not want to pay an arm and a leg because I am starting out and do not have much money.

I am not even sure what to put into google search: looking for a cheap attorney? Looking for a paralegal bookkeeper?

I dont even know who am I looking for...

Please help!

Mary Jay · Answer

Thank u so much for mark kohler!

I’ve listened to him today- so much good info!!!

Linda Weygant · Answer

Co-mingling funds is one of the quickest and easiest ways to break the veil. Essentially, if you consistently pay business expenses with personal assets or pay personal expenses with business assets, any half way decent attorney who is suing you will be able to say "your honor, the LLC and the individual behave as though they are a single entity. They do not operate separately and do not act separately because funds cross back and forth constantly and continually with no formal arrangement. Therefore, I ask that you declare the LLC as null for asset protection purposes and allow my client access to the personal assets."

Keith Weigand · Answer

@Mary Jay I'm not sure how accounting methods would ever break the 'veil' of an LLC. I have several LLCs and my cpa takes care of my annual accounting/taxes. He knows how to appropriate and file my returns. I've never heard him suggest that one way or another I would expose myself legally from under my LLC.

Mary Jay · Answer

Thank you so much!

Simon W. · Answer

The best the accountant can do for you is to make sure you are not co-mingling funds and also to follow the GAAP standards.

For example, I know enough accounting (my whole career in real estate) that what can be done and what shouldn't be done. For more detailed legal stuff, you have to talk to an attorney.

Costin I. · Answer

@Mary Jay - "how would an accountant who is not attorney know if you are doing something wrong?" He will not know. More than that, if you'll ask an accountant legal questions he will likely referr you to an attorney and vice versa - very frustrating when they drop the dead cat from one to the other and back and forth, but that will happen a lot more than one would hope. Is your job to take care of your babies. Even finding that one professional that can answer from both perspectives is very rare/hard and closer to an unicorn. You might find that kind of service with a bigger firm for which you'll pay accordingly ($$$$+ annually).

You need to learn yourself or pony up the money - here are some books to get you started on this:

• for accounting and taxes - Every Landlord's Tax Deduction Guide 15th Edition (and you can supplement that with Deduct It!: Lower Your Small Business Taxes and Tax Savvy for Small Business: A Complete Tax Strategy Guide Twentieth Edition
• legal and insurance - Every Landlord's Property Protection Guide: 10 Ways to Cut Your Risk Now (book w/ CD-Rom) and supplement with Every Landlord's Legal Guide (generally speaking Nolo has a good collection of books)
• property management - an excellent resource is The Book on Managing Rental Properties: A Proven System for Finding, Screening, and Managing Tenants With Fewer Headaches and Maximum Profit
• entity start and maintenace - Garrett Sutton's Start Your Own Corporation: Why the Rich Own Their Own Companies and Everyone Else Works for Them (Rich Dad Advisors) and Run Your Own Corporation: How to Legally Operate and Properly Maintain Your Company Into the Future

And here is a set of questions to help you judge if you maintain your corporate well:

Timmi Ryerson · Answer

I have read this thread and find that you already have good ideas and answers. But as someone who has an LLC and had the occasion to have to defend it I want to say that the most important part of picking someone for advice is that you choose someone who specializes in your field. So you are a real estate investor, get an accountant (not a bookkeeper) who has experience in that area. They can help you choose your chart of accounts and allocate what money is considered capital and what is expense. It will make a big difference on your balance sheets and P and L etc. Good luck. Sounds like the person giving the podcast is a great resource for all of us as well.

Mary Jay · Answer

I’ve thought about it.

I guess the question that I have is how would an accountant who is not attorney know if I’m doing something wrong?

Mary Jay · Answer

Very good point!

Costin I. · Answer

@Mary Jay - it sounds like you need an accountant/CPA/bookkeeper.

One thing you need to do with your LLC not to pierce the corporate veil and protect your assets, is to treat it like another person/entity. If you were to deal with another entity, like a vendor, contractor, or business you wouldn't buy stuff for them, right? And they wouldn't pay for food for you, right? If they do a service for you, they would invoice you, you would pay, get a receipt and vice-versa. All in each own bank accounts, with separate accounting, etc. Money follows a specific flow in and out.

Dumb question:Who am I looking for? Accountant or legal services?

Dumb question:Who am I looking for? Accountant or legal services?

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