{"id":410,"date":"2010-07-12T18:21:25","date_gmt":"2010-07-12T18:21:25","guid":{"rendered":"http:\/\/blog.topbev.com\/?p=410"},"modified":"2014-06-13T02:57:12","modified_gmt":"2014-06-13T02:57:12","slug":"protection-of-your-investment-easy-allocation-of-contributions-of-partners-it-is-extremely-hard-to-beat-the-limited-liability-company","status":"publish","type":"post","link":"https:\/\/blog.topbev.com\/?p=410","title":{"rendered":"Protection of Your Investment, Easy Allocation of Contributions of Partners–It is extremely hard to beat the “Limited Liability Company”"},"content":{"rendered":"

Anyone who owns a business venture should be concerned with certain basic truths.\u00a0 It is a sad but true fact that our society is becoming more and more litigious every day, and more and more small business owners are finding themselves on the wrong side of law suits.\u00a0 Right or wrong, the experience of defending a legal action is extremely stressful inflatable horse<\/a>.<\/p>\n

I have acted as a Massachusetts real estate attorney for more than 40 years.<\/strong>\u00a0During that period, I\u00a0have never had a client who “enjoyed” being sued and experiencing the expense and disruption of a lawsuit.\u00a0 It makes sense to put a legal shield between yourself and the creditors of your business, whether real or contingent.\u00a0 The\u00a0 Limited Liability Company (“LLC”) is an entity completely separate from its members.<\/p>\n

With proper planning, none of the members of the LLC should be personally liable for the debts of the LLC whether they arise in contract or tort.\u00a0The LLC also offers some unique advantages for unmarried couples<\/strong>who own real estate together.\u00a0This has been a subject of a recent post in which ActiveRain member showed much interest<\/p>\n

The operating agreement<\/strong> of the LLC can be tailored\u00a0to determine an “exit strategy<\/strong>” should the couple break up.\u00a0 More importantly, the operating agreement can be fashioned in such a way as to recognize disparate contributions of equity<\/strong> or disparate payments on the mortgage,<\/strong> so there can be no problems sorting our who owns what<\/strong> and who is entitled to what tax deduction<\/strong>.\u00a0 In many instances, the LLC can replace the use of joint tenancy agreements and tenancy in common agreements<\/strong>, which are often cumbersome and difficulty to administer and enforce.<\/p>\n

Do you need to raise money for a real estate or venture capital project?\u00a0 The LLC is a perfect vehicle.\u00a0 Admitting new members is a simple process, and there are no limits to the number and\/or character of additional investors.\u00a0 They can include all types of individuals, corporations, trusts, pension plans, foreign investors\u00a0(both out of Massachusetts and out of the country).\u00a0 This is certainly not the case with the corporate structure that most closely rivals the LLC, the subchapter S corporation.<\/p>\n

So, if your real estate transaction involves any group of people other than a married couple, I would strongly suggest an LLC. The planning, and protective, possibilities are endless, and the actuak working of the LLC easy to master. In the near future, my website, www.topkinsandbevans.com<\/a>\u00a0will contain examples\u00a0 of many different types of Operating Agreements<\/strong>. I am sure you will find one\u00a0among that group\u00a0which can be adapted to fit your unique needs.<\/p>\n

What Does It Cost?<\/p>\n

The cost to set up and maintain an LLC are roughly comparable to setting up a corporation, (figure between $1,500 and $2,000 including filing fee and drafting of the articles of organization and operating agreement).\u00a0 After the initial cost, however, the ongoing costs are minimal.\u00a0 There is no need to hold an annual meeting of shareholders or directors.\u00a0 The person designated as “manager” in the articles of organization can take actions on behalf of the entity without the approval of directors.\u00a0 Moreover, in a single member LLC,\u00a0 we at Topkins & Bevans have determined that there is no need for an operating agreement, so that the initial cost in that scenario is lower.<\/p>\n","protected":false},"excerpt":{"rendered":"

Anyone who owns a business venture should be concerned with certain basic truths.\u00a0 It is a sad but true fact that our society is becoming more and more litigious every day, and more and more small business owners are finding themselves on the wrong side of law suits.\u00a0 Right or wrong, the experience of defending … Continue reading Protection of Your Investment, Easy Allocation of Contributions of Partners–It is extremely hard to beat the “Limited Liability Company”<\/span> →<\/span><\/a><\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"spay_email":"","footnotes":""},"categories":[1],"tags":[271,273,272],"class_list":["post-410","post","type-post","status-publish","format-standard","hentry","category-uncategorized","tag-limited-liability-companies","tag-llcs-rather-than-joint-tenancy-agreement","tag-llcs-rather-than-tenancy-in-common-agreements"],"jetpack_featured_media_url":"","jetpack-related-posts":[{"id":173,"url":"https:\/\/blog.topbev.com\/?p=173","url_meta":{"origin":410,"position":0},"title":"Massachusetts Tenancy by the Entirety and Declaration of Homestead–A Basic Primer","date":"June 24, 2010","format":false,"excerpt":"In Massachusetts, and possibly in other states as well, significant protection is given to the non-debtor spouse if the married\u00a0couple elects to take title as \"husband and wife, tenants by the entirety\". There are other advantages to tenancy by the entirety, such as avoiding probate, but the principal advantage is\u2026","rel":"","context":"In \"declaration of homestead\"","img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":378,"url":"https:\/\/blog.topbev.com\/?p=378","url_meta":{"origin":410,"position":1},"title":"Couples “Uncoupling” and Owning Real Estate–“Breaking Up is Hard to Do”","date":"July 9, 2010","format":false,"excerpt":"In Massachusetts, where I have been practicing real estate law for more than 40 years, many unmarried couples purchase real estate together. Some engaged people are trying to take advantage of the current low interest rates, and market indecision, to get something \"we own before we marry\". Other couples, who\u2026","rel":"","context":"In \"joint tenancy\"","img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":382,"url":"https:\/\/blog.topbev.com\/?p=382","url_meta":{"origin":410,"position":2},"title":"Couples “Uncoupling”–The Sequel","date":"July 12, 2010","format":false,"excerpt":"Many of you showed interest in this post, and I thought it might make some sense to \"flesh out\"\u00a0terms and conditions \u00a0a well-drafted Tenancy in Common Agreement or Joint Tenancy Agreement (the \"Uncoupling Documents\")\u00a0might contain. There is nothing magic here: common sense and simplicity should always be the ruling impulses.\u2026","rel":"","context":"In \"fairness in dividing real property\"","img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":347,"url":"https:\/\/blog.topbev.com\/?p=347","url_meta":{"origin":410,"position":3},"title":"Representing Same Sex Clients–Documentation at Purchase Is Generally a Worthwhile Enterprise","date":"July 9, 2010","format":false,"excerpt":"In Massachusetts, where I practice real estate law, same sex marriage has been legally acknowledged. In a\u00a0situation where a same sex, married couple, purchases real estate, I suggest that the Grantee clause read \"a married couple, as tenants by the entirety\". Massachusetts law provides excellent protection from creditors to husbands\u2026","rel":"","context":"In \"representing same sex couple in real estate situations\"","img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":117,"url":"https:\/\/blog.topbev.com\/?p=117","url_meta":{"origin":410,"position":4},"title":"Evictions – If a tenant installs a fixture does it become the property of the landlord?","date":"April 2, 2010","format":false,"excerpt":"When a tenant installs an item in an apartment, such as track lighting, a chandelier, cabinetry, etc., which item is removable, but is attached to the wall, ceiling or floor of the premises, the installed item is known as a \u201cfixture.\u201d The standard rule in real estate law is that\u2026","rel":"","context":"In \"14 day notice to quit\"","img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":369,"url":"https:\/\/blog.topbev.com\/?p=369","url_meta":{"origin":410,"position":5},"title":"Massachusetts Real Estate Investors–The LLC beats All the Others for Ease of Operations and Protection","date":"July 9, 2010","format":false,"excerpt":"As a practicing real estate attorney with more than 40 years of experience in Massachusetts real estate transactions, I have pretty much seen all permutations and combinations of investment entities. When I first started practicing, limited partnerships were in vogue. That entity became further refined when people started creating corporations\u2026","rel":"","context":"In \"investment entities\"","img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]}],"_links":{"self":[{"href":"https:\/\/blog.topbev.com\/index.php?rest_route=\/wp\/v2\/posts\/410","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blog.topbev.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blog.topbev.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blog.topbev.com\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/blog.topbev.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=410"}],"version-history":[{"count":4,"href":"https:\/\/blog.topbev.com\/index.php?rest_route=\/wp\/v2\/posts\/410\/revisions"}],"predecessor-version":[{"id":939,"href":"https:\/\/blog.topbev.com\/index.php?rest_route=\/wp\/v2\/posts\/410\/revisions\/939"}],"wp:attachment":[{"href":"https:\/\/blog.topbev.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=410"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blog.topbev.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=410"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blog.topbev.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=410"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}