Can a FL LLC be owned by a WY LLC without foreign registration?

Question

I've read conflicting information about this issue, so I intend to check with a RE attorney. Does anyone here have insight into this matter?

Can a Florida property be owned by a WY LLC without registering as a foreign entity if the asset is static and non operational?

The property would be rented out by another FL LLC operating company. This local LLC would deal with tenants, contractors and all the operational side.

The house itself is therefor not doing business in Florida. This is obviously an asset protection strategy, I am just trying to make sure there are no tax or legal consequences.

I understand the other option is to have the house in a FL LLC, which is owned by a WY LLC. The state filing fees and annual fees are much higher with this second option. If you own one property, it's fine but if you have dozens pf properties, the annual cost goes into the thousands.

Any feedback would be appreciated.

Jerry W. · Answer

@Nat Chan The problem with not registering an LLC in a state where it owns property is that you have no registered agent to receive service so most likely the secretary of state would be served and you would not know that you have been served and you could have a default judgement against you and not know it.  Also you cannot legally file an answer or counterclaim even if you learn bout the lawsuit because you are not licensed to do business there.  Your protection from liability you want is useless.  Do it right and legally.  If you are not going to follow the law in registering your LLC what makes you think you will get any protection from it?  Use one WY LLC to own all of your other LLCs.  The $50 annual fee should not deter you from doing it the right way.  By the way buying a property in another state is doing business.

David M. · Answer

@Nat Chan

Yes, I understand a double LLC structure.  Its very common, especially to for people to form LLC's so that their LLC's can be members of a "deal" LLC created for that deal.  I just thought it odd you need to double check with FL if they allowed a LLC to own a FL registered LLC.  Perhaps I misunderstood.

Okay, so you are going after anonymity.  So, there is no reason for you to be a member of a FL LLC or for your WY LLC to own property (unless the property is located in WY).  This would defeat the whole purpose of your anonymity.  This was a part I didn't understand of your plan.

Nat C. · Answer

@David M.

It’s not odd, it’s one of the most common asset protection structures. Some people term it a double LLC. Basically an LLC owned by an LLC.

Your name won’t show up on the state records so it’s an excellent way to keep your assets anonymous.

Mike S. · Answer

@David M.

You can definitely have a FL LLC member as an out of state LLC.

That’s the way mines have been set up for years. Your only obligation is to have a registered agent in the state that can receive service during specified time on business days.

Most of the states have the same requirements.

David M. · Answer

@Nat Chan

That seems odd that FL wouldn't allow a foreign LLC to be the owner/member of their LLC.  Well, assuming you have use for the WY LLC, make that your primary LLC and form subordinate LLC's in the State you are investing to take advantage of the WY LLC.  Good luck.

Nat C. · Answer

@David M.

I was trying to simplify things by not having an LLC within an LLC but as I can’t ascertain from the Florida Division of Corporations if this would be permissible and based on the thoughts of my superior colleagues on here, I have reconsidered this structure.

I can’t get any personal loan anyway. The only loan I’d ever get would be commercial once I set up a company structure.

David M. · Answer

@Nat Chan

I agree with Jerry W.  You need to have the LLC holding Title to the property be registered in the State then property is located.  Otherwise, it has no legal standing in that State.  In fact, I thought they shouldn’t even let you go through with the transaction.

Why do the want the WY LLC?  I’ve only heard it’s advantage is anonymity.  Assuming that a the case, leave it as your anonymous proxy holding ownership of your other LLC’s.

You mentioned cost of having the LLC filings.  Honestly, if you are going through this much trouble for your asset protection, you are going to be paying a hell of a lot more for all the commercial loans because you hold Title in the LLC.  Please  don’t tell me you are doing that mix of ‘Title in LLC but mortgage in personal name’ tactic after doing this LLC work.  Unless you are doing this in pure cash, a few hundred to thousand is peanuts compared to the increased interest payments.  That’s the operating cost of using a LLC for asset protection instead of insurance.

Good luck.

Jerry W. · Answer

@Nat Chan, I am not familiar with FL law, but it is my understanding that the Wyoming LLC, by simply owning property in the state is doing business there.  If simply not being the one renting it out why not just have 2 FL LLCs?  Your LLC that is managing the property must have some authority to sign a lease on the property right?  How will you be able to buy insurance if no interest is owned in the property?  I am perhaps not understanding, but you need a document to show you have the legal right to control a property before a court of law will let you file an eviction.  That document to control the FL property is also doing business in FL.  I would strongly suggest that you register the legal owner of the property in the state where it owns the property.  Thank you for the kind words by the way.

Nat C. · Answer

I have been trying to get a hold of the Florida Division of Corporations to obtain an answer from them but they never answer their phone. Argh

Nat C. · Answer

You are the man who know the most, Jerry. I have always enjoyed reading your posts.

Here are my thoughts on your reply. 1. The Florida operating company is set up to take the hit of any lawsuits. They're the one with all the leases with tenants and contractors with contractors etc. All leads trace back to the FL operating company.

If anyone filed suit on the WY holding company, they would need to serve the address on record on the property appraiser register.

It's of course, not about saving $50! You yourself wrote in a previous post that the paperwork and ongoing upkeep of managing multiple LLC's would do your head in. My proposed idea sees 500k in equity being in each WY LLC. These LLC's are non-operational and receive no income or losses, so paperwork almost none, apart from the $50 annual renewal.

The FL operating company is the one with deals with ALL the money, so the accounting is very simplified.

This structure doesn't take into account properties with a mortgage. None of my properties have a mortgage and it's not an area I'm familiar with.

Can a FL LLC be owned by a WY LLC without foreign registration?

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