Single vs Multi Member LLCs
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- čas přidán 3. 11. 2014
- Discussion of the decision to form a single or multi member LLC.
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hey Lee, i like ur info, u seem like a Good / effective Lawyer
Great information! Thank you!
Good work. Thanks for sharing that.
Thank you for this video, extremely helpful 🙏
Thank you for the information.
Thank you for this!
Awesome content
Thank you for taking the time of your day
Our pleasure!
Good video, thanks Lee!
Thank you for your videos
Hi, I recently filed llc and I put myself and my husband as MGR. Does this means both of us are owners of the llc? Also I am in Florida, will this be considered a multi member LLC? For tax purposes, would it be better if I had put one of us as MGR instead of both of us?
Question: Can the sole managing partner of an LLC insert a "flat tire" clause in the operating agreement that transfers ownership of the LLC to a family member or relative if he is sued personally?
I was thinking 5 percent, too.
Thanks for the video. I'm starting a small Real Estate Brokerage Firm where I will be the sole owner. A fellow Virginian, and lawyer friend, gave me the blank form to use if I want to move forward as a single owner member Manager-Managed LLC. Now the question is which is best for my situation? (Important note, if it matters; I plan on being an LLC filing taxes with an S-Corp election.)
As a real estate brokerage firm, if you wanted to add another member they would have to be a licensed real estate broker as well. Since this may be difficult to do, you may as well just set up the LLC as a single member.
We started a company an LLC 2 years ago with a verbal agreement among 3 friends. 1 year later we had an attorney create an operating agreement which we back dated to the date the company was started. myself and 1 of the other members discovered the 3rd partner had taken over 40k. we terminated her via member meeting and she has since held up checks, reciepts and other documents. we have an up coming court date. will the operating agreement hold up in court if it was backed dated signed and nortorized by all members. she comingled funds, took out cash and paid for a cruise and personal items with the business account.
+Jeanell Fitzpatrick The operating agreement may or may not hold up in court. It is up to the judge to decide. It is hard to predict which way a judge is going to go when they have wide latitude as how to rule. If all the parties agreed to be bound by the operating agreement then hopefully the judge will uphold it even if it was back dated.
Hello, I filling out paperwork for an LLC in PA. I am going to be a single member LLC. I am on the forms page for organization of certificate. I am stuck at a particular question(S) Three questions. After each question, I have to select, APPLICABLE or NON APPLICABLE. The questions, read,
1) A member's interest in the company is to be evidenced by a certificate of membership interest.
2) Management of the company is vested in a manager or managers.
3) The company is a restricted professional company organized to render the following restricted professional service(s)
Can you explain what each question means or even if I need to fill this part out since I'm a single member?
HonestArttsEntertain Question 1: It is good to have a interest in he company evidenced by a certificate but is not required by law. With a single member LLC it is less necessary because it is obvious that you own 100% of the LLC. It is what ever you prefer.
Question 2: If you are running your LLC you would answer non applicable as your LLC will be member managed. You would answer applicable if you owned the LLC and another person managed the LLC.
Question 3: A Professional LLC is defined by state law. Some businesses are required to register as a Professional LLC such as lawyers, doctors, accountants, etc. depending on what the state requires.
I love how you bang out answers like giving candy out on Halloween .
Let me see I I understood correctly. If I have a Multi Member LLC and assign lets say 5 to 10% to a family member or friend, who will have interest and be active some how in the LLC. Creditors will not be able to touch a penny (properties etc) from the LLC in case of personal misfortune? or will they be able to collect from the 90% I own on the company?
+Adrian Santiago A creditor will only be able to get a charging order against your interest. This means that if you distribute income to yourself the creditor is going to get that income. If you don't distribute income, then the creditor just has to sit and wait. It does not mean that the creditor is going to get nothing.
Usually what happens is the creditor gets a charging order against your interest. You don't make distributions and work out some type of deal with the creditor. This means that you can usually get the amount lowered. Most people can't just sit and never take out distributions from their company. The charging order is simply a tool for lowering the amount that has to be paid.
Could you talk a bit about gross receipt tax? That's my only drawback to an LLC.
Gross receipts tax is a state tax that only exists in a handful of states. Each state applies it differently so there is not just one explanation for how it works. The basic idea is that the seller pays a tax on every sale they make.
+LegaLees Thank you!
I have already filed for an LLC last month and wanted to know with applying for my EIN should I put multiple members there or if I should include the other members who will be involved in managing he business with me? Newbie here!
When you apply for an EIN you will only list it as having multiple members if there are multiple owners of the company. You don't have to list everyone when you apply for an EIN online, you just have to let the IRS know if there is more then one member so they will know what your default tax classification will be.
Will a multi member Manager managed LLC with one Manager and one Member still have charging order protection?
No, because a manager does not count as an additional member unless they are named as a member. It would not be a multi member LLC unless you had more than one member. Charging order protection for single member LLCs depends on the state.
@@Legaleescorp hello. Is it a multi member LLC if there are two members..like me and my dad?
If you when the lottery can you form a LCC with your family as shareholders to share the winnings with your family is that legal or will the IRS come audit you and say you can't form an LLC after you win the lottery to avoid the gift tax?
If you form an LLC, assign the lottery ticket to that LLC, and then give family members interest in the LLC, you are giving a gift. That LLC has value equal to that winning lottery ticket and you are gifting part of that value to your family members in the form of membership interest.
South west...you know, Oregon, Washington, California...Southwest. K
Hi LegalLees,
l added my 2 children and husband to my LLC. l am a newbie in a real estate investment and do not know much. ls this additional members advisable at this early stage of my business?
Please advise, thank you.
If your husband and children are actually participating in the operation of the business then it is fine. If they are not, then the court could possibly consider your LLC a single member LLC by attributing the percentage your husband and kids own to you. If you plan on using income from the LLC to pass on to your kids, then they can stay on there. If they are not going to get income from the LLC, then you should probably take them off.
Hello there-
Husband and wife here in IL. We applied for a multimember LLC, which was approved and finalized.
When applying for an EIN I noted that the LLC had two members and the IRS considers us a multi-member and will initially classify us as a partnership. Is that right?
Yes, you would be a partnership with the IRS. However, you file a single 1040 for taxes, and if you wish you could be classified by the IRS as a disregarded entity and use one of your SS numbers for the tax ID for the LLC. You would still be a multi member LLC if you are in a common law state, but if you are in a community law state, you are actually a single member LLC, because H and W are one legal unit.
LegaLees hi and thanks for the response. Do I still need an EIN from the IRS then?
Is Il a common law state or community property state ? My guess is com prop
What if the two members are married? Would multi member be best? State is Texas
+Brent Cannon Texas is a community property state, but if both you and your wife are active participants in the business, it can work. Please see our article on this at www.llcwizard.com/spouse-member-llc
big brain time
My 2 kids and husband are just members. Have not been assigned any responsibilities yet.
If they are only members and not participating in the business then you not really getting any extra protection by having them as members. You may as well remove them so that their liabilities will not get tied back to your company.
Alright, thank you.
How do I add a percentage toward them via my situation. It’s 2 of us how do I assign my partners let’s say 10%
I am trying to decide between creating a llc in the states or a llc overseas in a corporate tax free state. Can Lee help me with this? Is he familiar with overseas llc's?
If the business being conducted is in the US, then you will need to register the LLC in the US anyway,s so you may as well create it in the US. If you are conducting business overseas then you can create the LLC overseas.
I want add my kids to the to operations forms but on the licenses itself. Is that ok
If the state requires you to list the members with the state, then you will have to list the kids on the articles of organization or a revised version of the articles of organization filed with the state. If the state does not require you to list the members (most don’t require a listing of members) then all you need to do is amend the operating agreement and list the kids as members. Don’t forget to issue ownership percentages in the form of a stock certificate (membership certificate) and enter the certificate in your membership interest log.
Does a husband & wife make an LLC to be considered multiple members?
If you are in a common law state, husband and wife are considered two separate members of the LLC. If you are in a community property state husband and wife are generally considered one single member.
Could I put two of my children down along with my self as owners and my other two kids as employers. The youngest is 9 twins 13 and oldest about to be 15. Thanks for the video and reply.
You can put kids in as owners but if they are still minors the courts often attribute their ownership to you and do not count them as separate owners.
Okay thx.
Is a multi member the same as LLP??
An LLP in a limited liability Partnership. It is a different type of legal entity that has been created in a hand full of states. It is similar to an LLC as for as asset protection but doesn't have as many tax options. If you are going to be taxed as a partnership you can for an LLP for asset protection but you may as well form an LLC.
Hello I have a ? Can I use my kids as the members of my multiple member llc
I don’t know what requirements Uber has for its drivers. You are entering into a big mess unless they have special provisions for you. Your personal auto insurance almost certainly will not cover you if you are in an accident while you are on duty for Uber. If you put your car in an entity (LLC or corporation) then your property taxes on the car and your insurance will likely triple. You do need some sort of insurance protection of the protection of an entity, such as an LLC. (Probably both protections)
LegaLees why do you think I drive for uber
Yes you can use children to make a multi member LLC. You have to be sure that the kids are really treated as members. Do they attend meetings? Do they get their share of distributions? Etc. The name of the game is to show a judge later that they were real additional members and not just names on a piece of paper. A spouse should work as an additional member, provided you are not in a community property state.
Because my assistant pasted my response for another person's comment asking about driving for Uber into this thread by accident on the channel comments page. Sorry about that. She has corrected the mistake by entering another reply with my original answer for you.
LegaLees thank you for the information I appreciate it , an I understand about the first reply
2 seconds are gone...bye
Lol
i stopped listening after "2 seconds"