what is the advantage or disadvantage of forming a LLC. And how does one go about forming one. what is the criteria
Talk to a RE attorney about LLCs and SCorps.
Take a good long read through the “Asset Protection, Legal” Newsgroup Forum located at the left hand edge of your screen. There are numerous discussions regarding a wide range of issues involving LLC formation
jmd_forest
as compared to what?
as compared to owning property in your name? Let’s say you own 3 rental properties. At the first one, little Suzy breaks her neck on the loose board you didn’t repair. Now all three of your properties are at risk.
Let’s say you own those three properties in three seperate entities. Now the other two properties are protected. that’s called “asset protection.”
how does an LLC compare to a corporation or S-corp?
Corporate stock is an investment. As such it is available to satisfy a judgement creditor. So, when you rear-end the lady in the Ford Pinto, she sues and wins, she can be awarded the stock of the corporation that owns the properties. you lose.
Member interest in an LLC is considered personal property by statute. As such it is not available to satisfy judgement creditors. Now she may sue and win, but she cannot gain control of the company and its assets.
Both a corporation and an LLC protect you personally from liabilities arising within the company. Only the LLC protects the company from your personal liabilities.
that’s a big difference.