@Rodney Saucier
@Stephen Polizzi
I just renewed my LLC in NH. Its $150. How much umbrella coverage is that? (if you have umbrella and know the coverage cost, chime in so we can compare.). I plan on having both, but maybe we can compare cost of LLC for lets say 2 properties vs extra umbrella insurance.
Why LLC?
I looked at it and came up with this:
Positives
+ Psychological - more professional. Creates a Business entity you are the "High and Mighty One".
+ Needed for Commercial loans. For those of us that dream of apartments, LLC seen by lenders as indicator of a valid business. These indicators are used to determine rates i.e. underwriting loans.
+ LLP, LLC needed for partnerships and pooled money/investors? My understanding is with investors, you create a LLC to structure everything.
+ Clearer way to separate Biz vs Personal. Liability issue only.
+ Maybe the cost is similar to registering a sole proprietorship with your locality? Might as will get liability protections.
Negatives
- Not favored by Residential lenders
- More paperwork than insurance.
- $100+ per year fees
- May incur extra taxes (business tax? )
- They are passthrough. (otherwise form a real corp). So no tax advantage.
Questions for us to answer:
Cost difference between 1M umbrella vs LLC
Does extra insurance provide same as LLC?
LLC good for Commercial/partnerships/investors, less good for residential (lenders perspective)?
What is difference in cost to have a sole proprietorship vs LLC registered with your state?
Are business taxes applied to LLCs but not Sole Proprietorship/Individuals?
