Will this protect someone if they get sued or is it illegal

Will this protect someone if they get sued or is it illegal

Rental Property Investor · Markdale Ontario · Member since 2019 · 94 posts · 12 votes

I’m new so keep that In mind also from Ontario but would like to here all responses from other states and provinces as well.

Ok let’s say I am buying and holding my properties and for some reason my corporation that owns such properties gets sued. Say however I had a second corporation, I sell all properties for pennies on a dollar (to lower capital gains).

Theoretically the first corporation getting sued then owns nothing. The only thing they can come after is the is the little bit of money I sold from one corporation to another.

Is this illegal or do people actually do it. Maybe I just came up with a new great way to protect yourself idk I love thinking and this is something I thought about a lot today. Wanted to get the forums opinion on this!

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  • Investor · brentwood, CA · Member since 2016 · 1k+ posts · 730 votes
    7y

    Sounds like a case of intentional naivety, probably not advisable.

  • Rental Property Investor · Markdale Ontario · Member since 2019 · 94 posts · 12 votes
    7y

    @Christopher Smith thanks for the reply, and yes I have no interest in doing it I was just curious on what’s stoping someone from doing such a thing. Do you mine explaining what intentional naivety means?

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