Multi LLC's shared monies?

4 Replies

Ok so I've looked and maybe missed it (so sorry if it's been talked about before and if it has can someone just post the link. Thanks)

I own a S corp management company and two LLC's. The LLC's own the properties and the S Corp owns nothing. If I have a surplus in one LLC can I use it for repairs on a property under the second LLC? I have been told a couple different ways on this. I was wonder how most handle this.

I guess I was thinking this question might spark a few thoughts! Ok well maybe I asked it wrong (LOL). Ill try this route. If LLC (B) is low on cash and LLC (A) has a large surplus do I just "loan" LLC (B) the money for roofs, etc... from LLC(A)? or can I gift it? I dont want to pay (A) back. I would hate to barrow money from somewhere else when I have income in (A). I also dont want to pay capitol gains on (A) if (B) needs repairs. Ok I'll see where this goes. I've read alot on BP but I'm just not finding my question answered. I finding lots of other great info on tax and LLC operation which has been great. I also loved the #49 podcast!!!

Originally posted by @Mark Bradford :

I guess I was thinking this question might spark a few thoughts! Ok well maybe I asked it wrong (LOL). Ill try this route. If LLC (B) is low on cash and LLC (A) has a large surplus do I just "loan" LLC (B) the money for roofs, etc... from LLC(A)? or can I gift it? I dont want to pay (A) back. I would hate to barrow money from somewhere else when I have income in (A). I also dont want to pay capitol gains on (A) if (B) needs repairs. Ok I'll see where this goes. I've read alot on BP but I'm just not finding my question answered. I finding lots of other great info on tax and LLC operation which has been great. I also loved the #49 podcast!!!

I'm no expert, but wouldn't that give grounds for the LLC's be to vulnerable to the "Alter Ego Theory?"

So in other words, if one LLC is sued, they can go after everything the other LLC owns because you swapped funds back and forth between the two LLC's therefore giving the impression that the two companies are really just one company, which is called the Alter Ego Theory.

Don't comminge funds, that is grounds for piercing the corporate veil should something go wrong. 

As I've read everyone's posts, I totally agree. Thanks for everyone's replies. "I shall not use monies from one LLC to another." I have looked into the idea of floating a loan to the second LLC if needed.

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