All Forum Posts by: Sean Constable

Hey Robert - to answer your question I would say that you are not going to get a personal loan in the name of an LLC. You would need to get the loan and property in your name then transfer to an LLC. This will raise the question of triggering the due on sale clause (I am sure there are a ton of questions and answers on the topic). I have never seen it triggered however in today's market who knows - it is a risk.

Hello to a fellow Long Islander.  Have you looked anywhere on the island yet?  

@Robert Baez go with an attorney so he can address your specific needs. Legal Doom is not the answer

@Chris Seveney anytime people, especially family members, go into any business together, they should formalize it. LLCs offer the greatest flexibility. There is so much more than liability protection to consider. If you want a good easy read addressing some of the issues take a look at The Partnership Charter by David Gage.

@Tim Rostro speak with some lenders. Most commercial loans are for shorter periods. The payments may be amortized over 25 years but you will have a balloon payment at end of loan term.

Second @Peter Tverdov comments about it being two separate entities

@Patrick Jones as an attorney I am biased. I couldn’t imagine going into that sort of a deal without an attorney from the get go. Depending on the type of commercial property there will be extensive due diligence work (are there tenants? Leases? If industrial - are there environmental concerns); sales agreement and title work. I am usually brought in once the basic parameters are discussed. If something does go wrong you want to be able to get your downpayment back.

@Kash Johnson first, kudos to him for building a legacy for his family. He would absolutely benefit from speaking with an estate planning attorney. No reason to give Uncle Sam more than his share or wasting $ on probate. If you need a referral I would be glad to give you a few names.

@James Hamling I never do this but since your response was filled with such arrogance a 10 second google search turned up the following from the MN government website:

https://mn.gov/deed/assets/sin...

There is increasing interest in the Single Member Limited Liability Company (SMLLC) as an alternative to the sole proprietorship for the organization and operation of a small business in Minnesota. A SMLLC is an LLC in which a single individual or other entity (called a "member") owns all of the LLC ownership interest. A SMLLC is a legal entity separate from its owner and so offers the owner a degree of protection from liability for the acts, debts, and obligations of the SMLLC. The SMLLC also offers the choice of taxation as a corporation or taxation as a “disregarded entity” where the SMLLC is disregarded for income tax purposes and all income flows directly to the owner who reports the income and pays the tax using the owner’s personal income tax return. Anecdotal evidence would indicate that the majority of individuals considering the SMLLC as an alternative to a sole proprietorship choose to be taxed as a disregarded entity.

How extensive is the liability protection given the owner of a SMLLC?
Unlike a sole proprietorship where the business owner and the business are one and the same, a SMLLC is an entity separate from its owner. Minnesota law provides that a member, governor, manager, or agent of a limited liability company is not personally liable for the acts, debts, liabilities, or obligations of the limited liability company.

It is important to note that the owner will be liable for any personal guarantees or pledges the owner may make to any financial institutions or other lenders to guarantee a loan or other credit facility or financing made to the SMLLC. 

The owner will be liable for any and all deliberate or negligent personal torts. [Yeah if you go and punch a tenant your LLC doesn't protect you]

The owner can also be personally liable for actions (like signing a contract) where it is not clear that the owner is acting on behalf of the SMLLC. All documents of the SMLLC, to include checks, contracts, purchase orders, bids, and the like should bear the name of the business entity with LLC following the name. Likewise, those documents should be clear on their signature lines that the owner is an authorized signer and is signing on behalf of the SMLLC and not in his personal capacity.

So, rather than paying for your super lawyer's Bentley, maybe hire someone who rides a bicycle.

And as for piercing the corporate veil, if a business owner can't open and operate a bank account and not use the business as if its his own personal account then there is no legal structuree or entity which will protect them.  

just my .02 cents from some hack NY lawyer.  Have a good day

@James Hamling love the know it alls on here who think their word is gold. Wow your lawyer has a Bentley I am super impressed