Would it be wise to add a spouse as a partner to an LLC if that spouse has better credit scores? Both myself and my partner have spouses with better credit scores than ourselves (not that our credit is bad, theirs is just better). Plus we’d be able to add their income when applying for financing, right? If they just remained silent partners, who cares if they’re legally listed as partners? Comments, conerns, otherwise?
Anybody? Bueller…Bueller…
You would have to modify the operating agreement to make the silent. Otherwise, they have rights to management decisions, access to the accounting and financial records, and LLC distributions. You also run the risk of their creditors getting a charging order against their LLC interest, which will prevent you from running the LLC the way you want.
thanks for the advice, i’m not too worried about their creditors though, I live in a community property state (WI) so legally half of my spouses debt is already mine. also, my spouses credit score is about 30pts higher than mine and i monitor both our scores so i would know about any negative credit issues ahead of time anyway.
Jake-
My mentor told me that as long as you require a partner for cash or credit, USE THEM. There’s nothing wrong with it if it helps you land that deal.
Also, I’d love to chat with you. I don’t know if you’re a member of Milwaukee RING or not but I am a local S.E. Wisconsin resident and investor myself. We could help each other now or down the road…