Maintaining an LLC

[Jeff S.]

Talked to an attorney yesterday (large downtown firm) about forming an LLC(s). She said you have to maintain it by having meetings, writing resolutions about decisions and keeping minutes. Really? By myself? How do you do that?

She said in court if you can't prove that you are a business by conducting your affairs like a business they will laugh at you. I keep getting feedback about a rental or 2 not being a business, bankers.

I know a lot of you are in business but what about a working stiff with a few house/plexes? This weakens the idea of having individual houses in LLC's, at least in my mind.

[J Scott]

First, I doubt anyone in court would actually laugh at you, so don't worry about that... :)

My state, at least, doesn't have any requirements about meetings or publishing minutes, so I don't have any annual requirements in terms for formalities for my LLCs. But, certainly, if you're going to make changes to the way the business operates (who's involved, how decisions are made, etc), you're going to to have to -- and want -- document those.

But, I would imagine that anyone who is smart enough and capable enough to own investment real estate is smart enough and capable enough to learn the basics of maintaining the LLC, keeping separate books, keeping separate bank accounts, etc. It sounds daunting at first, but it's really not.

If forming a business entity is the right thing to do, please don't let the formalities stop you. Do some research, ask some specific questions, and I'm confident you'll be able to handle it!