Using a C corp as an umbrella on other llc's in Michigan

Using a C corp as an umbrella on other llc's in Michigan

Grand Rapids, MI · Member since 2015 · 23 posts · 12 votes

I have an idea of how I want to set up my company for the future and want to run it by the BP community for feedback, I currently have an LLC in the form of a remodeling business that is supplying much of the capital for my real estate investing activities. what I am thinking of doing is starting a C corporation and having that own the LLC, running all the income/ expenses thru the corporation and paying myself from the corporation. Basically making the remodeling company an income stream to the corporation. I am looking at this as a growth strategy for the future that I can add income streams to the corporation by adding or acquiring real estate and businesses. I would appreciate any input you all may have. This is just preliminary research and I will be seeking legal and accounting help if I decide to go this route.

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  • Phoenix, AZ · Member since 2017 · 6 posts · 2 votes
    8y
    This sounds pretty good. I believe there are some tax advantages to C-corp. Also would like to know more about this structure.
  • Real Estate Agent · Grand Rapids, MI · Member since 2014 · 493 posts · 200 votes
    8y

    Check with an accountant that specializes or is at least very experienced in real estate.

  • Real Estate Agent · Houma, LA · Member since 2016 · 238 posts · 115 votes
    8y

    What @Account Closed said. There are extra requirements for C-Corps in the way of reporting and taxation...the business gets taxed, plus you get taxed on any pay you receive from the C-Corp, so that may be a down side. Another option could be to have a separate LLC set up as a holding company for the remodeling business, allowing you to set up a separate LLC for your REI activities. The holding corp could then fund the REI business.

    Check out Loopholes of Real Estate and Start Your Own Corporation by Garrett Sutton for better advice.

    Disclaimer: I don't play an attorney or an accountant on the internet. Check with your attorney and accountant for advice in your specific situation.

  • Grand Rapids, MI · Member since 2015 · 23 posts · 12 votes
    8y
    thanks@Clay Powell & @Clint Galliano , I will be looking more into this as I move into 2018, LLC'S seem to be the better option for the size of my business, I am currently looking for an accountant in West Michigan, I am out growing the one I have now, looking for someone who knows RE and business so if you guys have any recommendations I would appreciate it
  • Real Estate Agent · Grand Rapids, MI · Member since 2014 · 493 posts · 200 votes
    8y

    @Jason Blain  I'd recommend David Hill for your attorney and Duane Culver for your accountant.

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