All Forum Posts by: Tam Nguyen

Quote from @Charley Gates:

Hi Tam.

There is no statutory or case law requirement for LLCs to have annual meeting minutes.  

Having said that, I definitely create annual meeting minutes for my LLCs for the following reasons:

1)  it's fairly straightforward to do

2) it shows that you are following corporate formalities which strengthen the legitimacy of the LLC

3) it makes it more difficult for a creditor to 'pierce the corporate veil' meaning the creditor argues that the LLC is really just a proxy for you and thus tries to pursue you personally for damages

I also recommend that each LLC has its own bank account and that funds are never mixed between companies.

Hope that this helps!

Thanks, Charley.  It makes sense but point #3 here brings up something interesting.  Let's say I have a property in an LLC for State 1 and another property in another LLC say State 2.  Both LLCs are owned by a holding LLC.  All have their own accounts.  Let's say State 1's property brings in $1000 CF a month while State 2 LLC brings in $800.  Based on what you said, you should not move money from State 1 to pay State 2 correct? 

Quote from @Doug Smith:

I think the big question is how many members are in the LLC? If it's just you, then it's pretty simply. I am speaking from a lending standpoint, but we'll usually ask for a "Unanimous Consent" for the loan, but that's pretty much it. How many members are in the LLC? That will allow us to give you a good answer.

Hi Doug,

Sorry for the delay here.  It's a single-member LLC.  Just me.

Thanks Luis and everyone else for your guidance and thoughts on this.  Super helpful for sure!  This gives me a bit more direction on this.

I have several LLCs (holding company that owns LLCs in states where I currently have rental properties).  I'm struggling with and have not found any good guidance on how to best keep minutes for my LLCs.  Wondering if I can get some advice here.

1.  Are there any good, simple meeting minutes templates that can be recommended?  I've found a bunch online but they vary quite a bit.
2.  How often do you need to have minutes (i.e. once a week, once a month, quarterly, once a year) in order to ensure your LLCs are seen as legitimate?
3.  Are there any guidance on the type of decisions that should be noted vs. those that do not?  I've talked to some folks who say everything vs. just major decisions.  Would love to get some thoughts from the general group here on best practices would be great.  This is probably where I'm struggling the most.  
4.  Do I need minutes for all my LLCs or just the main holding LLC?

Thanks!

I'm looking to best understand the best way to fund an LLC. I did an initial seed fund but not a lot of money (just enough to open up some bank accounts). Eventually, I would like to build up the LLC business profile where I can secure funds (LOCs) through the business. Unfortunately, until that happens, I will need to continue to fund the LLC when opportunities arise.

Question(s) -
1.  Does it matter how often I should fund the LLC (i.e. bigger amounts with less frequency or smaller amounts with higher frequency)?  Pros/Cons to either path?  My default path at the moment is to fund when needed but not sure if there are tax or other implications
2.  What kind of records should I keep?  For instance, I have a colleague that wants to physically go to a bank to do the funding in order to get a deposit slip as records.   My preference would be electronic transfers but wanted to verify those records are sufficient
3.  Any guidance on how to note these in the LLC meeting notes would be helpful.
4.  Any issues with creating a loan between LLC and myself?  Thought about this but it seems complicated and may negate some of the tax advantages.  Curious if anyone has thought about or done this.

Thanks for all your help in advance.

@Luis Alvarez Thanks so much for the insight.  Super helpful for sure.  You pretty much validated what I was thinking which is option 2 is the preferred path forward in this case especially if I'm prioritizing anonymity and liability protection.

I'm relatively new to REI but am at the stage where I'm looking to acquire more rentals (mostly out-of-state). To date, I have a few rental properties (1 in CA where I reside, and another out of state). These are all in my personal name at the moment. My goal is to move the current rentals and all future acquisitions out of my personal name and into formal LLCs for asset protection and anonymity. At the same time, I'd like to operate under 1 name (entity) across my portfolio but am not sure of the best way to go about it. Below is how I currently have my LLC structure set up along with options I've been considering.

NOTE –

Bold = items established today

Non-bold & Italic = future items not yet established

ABC LLC should be the primary holding company for EVERYTHING

ABC LLC (WY Holding)

    |__ XYZ LLC (CA subsidiary LLC - where I currently reside w/ 1 LTR)

    |__ Subsidiary A LLC (another out-of-state LLC w/ 1 LTR)

    |__ Subsidiary B LLC (future out-of-state LLC)

Option 1 --- (1) Operate under XYZ LLC as primary business name and entity; (2) XYZ LLC is owned by ABC LLC; (3) All other subsidiary LLCs are owned by XYZ LLC

Option 2 --- (1) Establish a DBA in CA and link it to XYZ LLC; (2) Operate under DBA as the primary business name and entity for all rentals; (3) XYZ LLC and all other subsidiary LLCs are owned by ABC LLC

Question(s):

(a) In option 2, would I need to register the same DBA in every state I end up acquiring a property in or will doing that in CA be enough?

(b) I'm assuming tax implications would be the same in both options but not sure since option 1 is a 2-tier structure where as option 2 is a 3-tier structure

If there are any modifications or other options I should consider, please feel free to let me know. Thanks in advance for any guidance/thoughts on which option you think would be the ideal path forward and why you think that.