EIN# for Property LLC under a Holding LLC
Member since 2020 · 82 posts · 4 votes
When you have a Property LLC owned by a single member Holding LLC, how do you obtain an EIN# for it? Do you apply for the EIN# using your SSN as the member and owner of the Holding LLC or you obtain it by using the Holding LLC EIN#?
And how do you open a bank account for the Property LLC when it is owned and managed by the member (Holding LLC)?
I see. I don't mind applying using my ssn#, just want to do it the right way. I had to use my ssn# when i applied to the EIN of the holding LLC. One other question that come to mind is, how do I open a bank account for the Property LLC if its owned by the Holding LLC and member managed by it? The holding LLC is a manager managed and I am the manager owner. Property LLC is single member managed and 100% owned by the Holding. I am not on the Property LLC. Being the owner and manager of the Holding LLC gives me right to the Property LLC?
The bank will want the EIN for that LLC.
They will want to see the operating agreement and articles of organization.
The member/manager is your holding. You are the manager of the holding; so when you sign for the property LLC you can sign:
for Property LLC, by John Doe as Manager of Holding LLC, member/manager of Property LLC
The bank will probably also need to see document from the holding LLC showing that you are the manager.
You may also be asked a resolution from Property LLC to open a bank account.
In my case, my holding LLC and properties LLC accounts are in the same bank (easier to do instant online transfer from the same login). So they already have all the information for my holding, and when I am adding a new property LLC, they just need the documents for the LLC and they link it immediately to the holding. I don't even have to go to the branch anymore, I just email them the article of organization, sign a few online documents and a few days later my new bank account is ready to be used.
Google is your friend. It's free from the IRS website - https://www.irs.gov/businesses...
@Mike Jones
If the single member LLC is disregarded by the IRS and fall under the umbrella of the holding you technically don't need an EIN for it as you will use the holding EIN.
However you can obtain an EIN for it for banking purpose to open an account.
When you apply for an EIN on the IRS website you are asked for an SSN of a natural person. For me it would make sense that when you apply you should link it to your holding EIN, but the IRS in their instruction notice says natural person only. So if you are the beneficiary of the holding structure you are supposed to use your own SSN on the form. I don’t know how the IRS find what belongs to what eventually as they won’t link the holding to the disregarded entity that way.
Thanks guys. Its a little confusing. I looks at the IRS link shared by @Calvin Thomas and to my understanding, the IRS wants a real person's ssn, not an entity's ein . See below from the IRS site:
All EIN applications (mail, fax, electronic) must disclose the name and Taxpayer Identification Number (SSN, ITIN, or EIN) of the true principal officer, general partner, grantor, owner or trustor. This individual or entity, which the IRS will call the "responsible party," controls, manages, or directs the applicant entity and the disposition of its funds and assets. Unless the applicant is a government entity, the responsible party must be an individual (i.e., a natural person), not an entity. If there is more than one responsible party, the entity may list whichever party the entity wants the IRS to recognize as the responsible party.
According to the Instructions for the current revision of the application, the "responsible party" is defined as follows:
For entities with shares or interests traded on a public exchange, or which are registered with the Securities and Exchange Commission, "responsible party" is (a) the principal officer, if the business is a corporation, (b) a general partner, if a partnership, (c) the owner of an entity that is disregarded as separate from its owner (disregarded entities owned by a corporation enter the corporation's name and EIN), or (d) a grantor, owner, or trustor if a trust.
For all other entities, "responsible party" is the person who has a level of control over, or entitlement to, the funds or assets in the entity that, as a practical matter, enables the individual, directly or indirectly, to control, manage or direct the entity and the disposition of its funds and assets. The ability to fund the entity or the entitlement to the property of the entity alone, however, without any corresponding authority to control, manage, or direct the entity (such as in the case of a minor child beneficiary), does not cause the individual to be a responsible party.
Thanks guys. Its a little confusing. I looks at the IRS link shared by @Calvin Thomas and to my understanding, the IRS wants a real person's ssn, not an entity's ein . See below from the IRS site:
All EIN applications (mail, fax, electronic) must disclose the name and Taxpayer Identification Number (SSN, ITIN, or EIN) of the true principal officer, general partner, grantor, owner or trustor. This individual or entity, which the IRS will call the "responsible party," controls, manages, or directs the applicant entity and the disposition of its funds and assets. Unless the applicant is a government entity, the responsible party must be an individual (i.e., a natural person), not an entity. If there is more than one responsible party, the entity may list whichever party the entity wants the IRS to recognize as the responsible party.
According to the Instructions for the current revision of the application, the "responsible party" is defined as follows:
For entities with shares or interests traded on a public exchange, or which are registered with the Securities and Exchange Commission, "responsible party" is (a) the principal officer, if the business is a corporation, (b) a general partner, if a partnership, (c) the owner of an entity that is disregarded as separate from its owner (disregarded entities owned by a corporation enter the corporation's name and EIN), or (d) a grantor, owner, or trustor if a trust.
For all other entities, "responsible party" is the person who has a level of control over, or entitlement to, the funds or assets in the entity that, as a practical matter, enables the individual, directly or indirectly, to control, manage or direct the entity and the disposition of its funds and assets. The ability to fund the entity or the entitlement to the property of the entity alone, however, without any corresponding authority to control, manage, or direct the entity (such as in the case of a minor child beneficiary), does not cause the individual to be a responsible party.
Yes, you as a member would be the responsible party and provide your SS #. You can also be a responsible 3rd party and just apply on the behalf of the LLC and not list yourself as a member or manager.
Thanks guys. Its a little confusing. I looks at the IRS link shared by @Calvin Thomas and to my understanding, the IRS wants a real person's ssn, not an entity's ein . See below from the IRS site:
All EIN applications (mail, fax, electronic) must disclose the name and Taxpayer Identification Number (SSN, ITIN, or EIN) of the true principal officer, general partner, grantor, owner or trustor. This individual or entity, which the IRS will call the "responsible party," controls, manages, or directs the applicant entity and the disposition of its funds and assets. Unless the applicant is a government entity, the responsible party must be an individual (i.e., a natural person), not an entity. If there is more than one responsible party, the entity may list whichever party the entity wants the IRS to recognize as the responsible party.
According to the Instructions for the current revision of the application, the "responsible party" is defined as follows:
For entities with shares or interests traded on a public exchange, or which are registered with the Securities and Exchange Commission, "responsible party" is (a) the principal officer, if the business is a corporation, (b) a general partner, if a partnership, (c) the owner of an entity that is disregarded as separate from its owner (disregarded entities owned by a corporation enter the corporation's name and EIN), or (d) a grantor, owner, or trustor if a trust.
For all other entities, "responsible party" is the person who has a level of control over, or entitlement to, the funds or assets in the entity that, as a practical matter, enables the individual, directly or indirectly, to control, manage or direct the entity and the disposition of its funds and assets. The ability to fund the entity or the entitlement to the property of the entity alone, however, without any corresponding authority to control, manage, or direct the entity (such as in the case of a minor child beneficiary), does not cause the individual to be a responsible party.
Yes, you as a member would be the responsible party and provide your SS #. You can also be a responsible 3rd party and just apply on the behalf of the LLC and not list yourself as a member or manager.
I see. I don't mind applying using my ssn#, just want to do it the right way. I had to use my ssn# when i applied to the EIN of the holding LLC. One other question that come to mind is, how do I open a bank account for the Property LLC if its owned by the Holding LLC and member managed by it? The holding LLC is a manager managed and I am the manager owner. Property LLC is single member managed and 100% owned by the Holding. I am not on the Property LLC. Being the owner and manager of the Holding LLC gives me right to the Property LLC?
I see. I don't mind applying using my ssn#, just want to do it the right way. I had to use my ssn# when i applied to the EIN of the holding LLC. One other question that come to mind is, how do I open a bank account for the Property LLC if its owned by the Holding LLC and member managed by it? The holding LLC is a manager managed and I am the manager owner. Property LLC is single member managed and 100% owned by the Holding. I am not on the Property LLC. Being the owner and manager of the Holding LLC gives me right to the Property LLC?
The bank will want the EIN for that LLC.
They will want to see the operating agreement and articles of organization.
The member/manager is your holding. You are the manager of the holding; so when you sign for the property LLC you can sign:
for Property LLC, by John Doe as Manager of Holding LLC, member/manager of Property LLC
The bank will probably also need to see document from the holding LLC showing that you are the manager.
You may also be asked a resolution from Property LLC to open a bank account.
In my case, my holding LLC and properties LLC accounts are in the same bank (easier to do instant online transfer from the same login). So they already have all the information for my holding, and when I am adding a new property LLC, they just need the documents for the LLC and they link it immediately to the holding. I don't even have to go to the branch anymore, I just email them the article of organization, sign a few online documents and a few days later my new bank account is ready to be used.
I see. I don't mind applying using my ssn#, just want to do it the right way. I had to use my ssn# when i applied to the EIN of the holding LLC. One other question that come to mind is, how do I open a bank account for the Property LLC if its owned by the Holding LLC and member managed by it? The holding LLC is a manager managed and I am the manager owner. Property LLC is single member managed and 100% owned by the Holding. I am not on the Property LLC. Being the owner and manager of the Holding LLC gives me right to the Property LLC?
The bank will want the EIN for that LLC.
They will want to see the operating agreement and articles of organization.
The member/manager is your holding. You are the manager of the holding; so when you sign for the property LLC you can sign:
for Property LLC, by John Doe as Manager of Holding LLC, member/manager of Property LLC
The bank will probably also need to see document from the holding LLC showing that you are the manager.
You may also be asked a resolution from Property LLC to open a bank account.
In my case, my holding LLC and properties LLC accounts are in the same bank (easier to do instant online transfer from the same login). So they already have all the information for my holding, and when I am adding a new property LLC, they just need the documents for the LLC and they link it immediately to the holding. I don't even have to go to the branch anymore, I just email them the article of organization, sign a few online documents and a few days later my new bank account is ready to be used.
Makes sense. Thank you. I was going to have both account with the same bank but I am not sure if my local credit union will want to open an account for the Holding LLC being out of state. So I am thinking about going to a bank that is nationwide (i.e bank of america or wells fargo) for the holding bank account, and use my local credit union which i will be getting loans from for my property account. would be nice to have both there.
Here is what I found out for the signature:
Property LLC,
By: Holding LLC, Managing Member
By: ____________
John Doe, Manager
Makes sense. Thank you. I was going to have both account with the same bank but I am not sure if my local credit union will want to open an account for the Holding LLC being out of state. So I am thinking about going to a bank that is nationwide (i.e bank of america or wells fargo) for the holding bank account, and use my local credit union which i will be getting loans from for my property account. would be nice to have both there.
The problem with most national banks are that they often have a high minimum amount to keep on the free accounts. Most local banks have low minimum account requirements. But it is true that some don't like out of state LLCs. Shop around, some will accept them.
Makes sense. Thank you. I was going to have both account with the same bank but I am not sure if my local credit union will want to open an account for the Holding LLC being out of state. So I am thinking about going to a bank that is nationwide (i.e bank of america or wells fargo) for the holding bank account, and use my local credit union which i will be getting loans from for my property account. would be nice to have both there.
The problem with most national banks are that they often have a high minimum amount to keep on the free accounts. Most local banks have low minimum account requirements. But it is true that some don't like out of state LLCs. Shop around, some will accept them.
You are right. Bank of america is ready to open an account for my Holding LLC without even needing to go in. There is a branch 2 miles from my house. They already approved everything, but its a $14 per month for fees or $3000 total balance to waive the fee. The holding bank account will not do alot of transactions.
My credit union that I have a relation with has free accounts. LOL.
May just end up doing bank of a and local credit union. Cost of doing business I guess. :)
@Mike Jones Either way works for the EIN but opening the bank account can prove more challenging with an out of state LLC. As @Mike S. stated, you will need to bring your documents with you to the bank. Here is the catch - do not try and use your out of state business address when attempting to open an account locally. For example, when we set up a Wyoming Holding LLC, our clients are provided a Wyoming business address, but when they try and open a bank account in their home state for the Wyoming LLC, the bank will refuse the out of state address. Your local bank will want a local address. So be prepared with a local address when you go in. I also recommend banking with one national bank for all of your business entities and personal and keep at least one community bank on the side (lender backup bank).
When you ask about signing on behalf of the special purpose state LLC, this can get confusing when using a member-managed setup back to the holding LLC. You should consider setting up your special-purpose state LLC with officer positions and appoint yourself as president. The officer position provides you apparent authority over the entity but will not disclose your information on the secretary of state.
@Mike Jones Either way works for the EIN but opening the bank account can prove more challenging with an out of state LLC. As @Mike S. stated, you will need to bring your documents with you to the bank. Here is the catch - do not try and use your out of state business address when attempting to open an account locally. For example, when we set up a Wyoming Holding LLC, our clients are provided a Wyoming business address, but when they try and open a bank account in their home state for the Wyoming LLC, the bank will refuse the out of state address. Your local bank will want a local address. So be prepared with a local address when you go in. I also recommend banking with one national bank for all of your business entities and personal and keep at least one community bank on the side (lender backup bank).
When you ask about signing on behalf of the special purpose state LLC, this can get confusing when using a member-managed setup back to the holding LLC. You should consider setting up your special-purpose state LLC with officer positions and appoint yourself as president. The officer position provides you apparent authority over the entity but will not disclose your information on the secretary of state.
Thanks @Clint Coons. Bank of A is ready to open an account for the WY holding LLC, and my local credit will open one for my properly LLC which as a local address.
When it comes to the signing on behalf of the in state LLC, I did not get your comment above. Do I really need to go that extra mile by adding an officer position and making myself president??
Can't I just sign as :
Property LLC,
By: Holding LLC, Managing Member
By: ________
John Doe, Manager
Whats wrong with signing this way? and having the Holding LLC as the member of the Property LLC??
When you ask about signing on behalf of the special purpose state LLC, this can get confusing when using a member-managed setup back to the holding LLC. You should consider setting up your special-purpose state LLC with officer positions and appoint yourself as president. The officer position provides you apparent authority over the entity but will not disclose your information on the secretary of state.
That is an interesting concept. It will also helps when you sign on behalf of the LLC to avoid disclosing your structure to third parties.
I will definitely implement it on my next properties LLC.
You are right. Bank of america is ready to open an account for my Holding LLC without even needing to go in. There is a branch 2 miles from my house. They already approved everything, but its a $14 per month for fees or $3000 total balance to waive the fee. The holding bank account will not do alot of transactions.
My credit union that I have a relation with has free accounts. LOL.
May just end up doing bank of a and local credit union. Cost of doing business I guess. :)
My holding LLC has accounts in local banks and also national ones. Both kind of banks have different advantages. Some may offer easy money transfer (free wire, Zelle, ACH, ...) and also can issue credit card to start building your business credit.
Having relationship with a local bank that is also a lender is well worth it especially for commercial loans that you would probably need at one time or another (loan to entities or portfolio lending when you exceed a certain number of properties). For that reason, I have opened accounts in multiple local banks, at least to try their services and reactivity.
I also had some bad past experience with some banks closing or freezing accounts at the worst time due to change of their policy or other concerns asking for mode documentation. So for my main entities, I always have at least two accounts in different banks. Also for my management property I need a separate segregated account to hold security deposit anyway, so you will need multiple accounts at some point.
When you start it is probably not very useful to have so much redundancy, but when you start growing your business, you will figure out which bank to use for what.
You need to be organized to manage all these accounts as it could become overwhelming. A good book keeping is a must. Also I am buying blank checks and printing them myself with magnetic laser ink, so I can from my computer print the right check for the right entity from the right bank account without having to store many checkbooks.
So the Property LLC will still be member managed and own by the Holding LLC. how is the office/president assigned? Through the operating agreement? When the president is assign, how does he sign documents?
I may consider this as I haven't formed the Property LLC yet.
You are right. Bank of america is ready to open an account for my Holding LLC without even needing to go in. There is a branch 2 miles from my house. They already approved everything, but its a $14 per month for fees or $3000 total balance to waive the fee. The holding bank account will not do alot of transactions.
My credit union that I have a relation with has free accounts. LOL.
May just end up doing bank of a and local credit union. Cost of doing business I guess. :)
My holding LLC has accounts in local banks and also national ones. Both kind of banks have different advantages. Some may offer easy money transfer (free wire, Zelle, ACH, ...) and also can issue credit card to start building your business credit.
Having relationship with a local bank that is also a lender is well worth it especially for commercial loans that you would probably need at one time or another (loan to entities or portfolio lending when you exceed a certain number of properties). For that reason, I have opened accounts in multiple local banks, at least to try their services and reactivity.
I also had some bad past experience with some banks closing or freezing accounts at the worst time due to change of their policy or other concerns asking for mode documentation. So for my main entities, I always have at least two accounts in different banks. Also for my management property I need a separate segregated account to hold security deposit anyway, so you will need multiple accounts at some point.
When you start it is probably not very useful to have so much redundancy, but when you start growing your business, you will figure out which bank to use for what.
You need to be organized to manage all these accounts as it could become overwhelming. A good book keeping is a must. Also I am buying blank checks and printing them myself with magnetic laser ink, so I can from my computer print the right check for the right entity from the right bank account without having to store many checkbooks.
Sounds good. I may just have my holding llc account at the big bank and the property llc account at the credit union for loans. having multi accounts at different bank for redundancy may confuse one. How do you manage them when doing your bookkeeping? Mine is very single right now, rent comes in property llc, bills get paid, holding llc gets whats left over. 2 accounts.
Here is the catch - do not try and use your out of state business address when attempting to open an account locally. For example, when we set up a Wyoming Holding LLC, our clients are provided a Wyoming business address, but when they try and open a bank account in their home state for the Wyoming LLC, the bank will refuse the out of state address.
I assume you are referring to local banks only? I was able to open an account with US Bank for my WY-based Holding LLC with a WY business address.
On another note, your videos were very helpful in organizing my business structure...so thanks!
Thanks guys. Its a little confusing. I looks at the IRS link shared by @Calvin Thomas and to my understanding, the IRS wants a real person's ssn, not an entity's ein . See below from the IRS site:
All EIN applications (mail, fax, electronic) must disclose the name and Taxpayer Identification Number (SSN, ITIN, or EIN) of the true principal officer, general partner, grantor, owner or trustor. This individual or entity, which the IRS will call the "responsible party," controls, manages, or directs the applicant entity and the disposition of its funds and assets. Unless the applicant is a government entity, the responsible party must be an individual (i.e., a natural person), not an entity. If there is more than one responsible party, the entity may list whichever party the entity wants the IRS to recognize as the responsible party.
According to the Instructions for the current revision of the application, the "responsible party" is defined as follows:
For entities with shares or interests traded on a public exchange, or which are registered with the Securities and Exchange Commission, "responsible party" is (a) the principal officer, if the business is a corporation, (b) a general partner, if a partnership, (c) the owner of an entity that is disregarded as separate from its owner (disregarded entities owned by a corporation enter the corporation's name and EIN), or (d) a grantor, owner, or trustor if a trust.
For all other entities, "responsible party" is the person who has a level of control over, or entitlement to, the funds or assets in the entity that, as a practical matter, enables the individual, directly or indirectly, to control, manage or direct the entity and the disposition of its funds and assets. The ability to fund the entity or the entitlement to the property of the entity alone, however, without any corresponding authority to control, manage, or direct the entity (such as in the case of a minor child beneficiary), does not cause the individual to be a responsible party.
Yes, you as a member would be the responsible party and provide your SS #. You can also be a responsible 3rd party and just apply on the behalf of the LLC and not list yourself as a member or manager.
I see. I don't mind applying using my ssn#, just want to do it the right way. I had to use my ssn# when i applied to the EIN of the holding LLC. One other question that come to mind is, how do I open a bank account for the Property LLC if its owned by the Holding LLC and member managed by it? The holding LLC is a manager managed and I am the manager owner. Property LLC is single member managed and 100% owned by the Holding. I am not on the Property LLC. Being the owner and manager of the Holding LLC gives me right to the Property LLC?
You really should be speaking with a CPA if it is setup so complicatedly. I understand the reasoning, but I do not know how you set your structure up so it's hard to advise. If you just apply as a third party designee, you should be fine. There is an option for that when you go on the IRS apply for an EIN website.
Thanks guys. Its a little confusing. I looks at the IRS link shared by @Calvin Thomas and to my understanding, the IRS wants a real person's ssn, not an entity's ein . See below from the IRS site:
All EIN applications (mail, fax, electronic) must disclose the name and Taxpayer Identification Number (SSN, ITIN, or EIN) of the true principal officer, general partner, grantor, owner or trustor. This individual or entity, which the IRS will call the "responsible party," controls, manages, or directs the applicant entity and the disposition of its funds and assets. Unless the applicant is a government entity, the responsible party must be an individual (i.e., a natural person), not an entity. If there is more than one responsible party, the entity may list whichever party the entity wants the IRS to recognize as the responsible party.
According to the Instructions for the current revision of the application, the "responsible party" is defined as follows:
For entities with shares or interests traded on a public exchange, or which are registered with the Securities and Exchange Commission, "responsible party" is (a) the principal officer, if the business is a corporation, (b) a general partner, if a partnership, (c) the owner of an entity that is disregarded as separate from its owner (disregarded entities owned by a corporation enter the corporation's name and EIN), or (d) a grantor, owner, or trustor if a trust.
For all other entities, "responsible party" is the person who has a level of control over, or entitlement to, the funds or assets in the entity that, as a practical matter, enables the individual, directly or indirectly, to control, manage or direct the entity and the disposition of its funds and assets. The ability to fund the entity or the entitlement to the property of the entity alone, however, without any corresponding authority to control, manage, or direct the entity (such as in the case of a minor child beneficiary), does not cause the individual to be a responsible party.
Yes, you as a member would be the responsible party and provide your SS #. You can also be a responsible 3rd party and just apply on the behalf of the LLC and not list yourself as a member or manager.
I see. I don't mind applying using my ssn#, just want to do it the right way. I had to use my ssn# when i applied to the EIN of the holding LLC. One other question that come to mind is, how do I open a bank account for the Property LLC if its owned by the Holding LLC and member managed by it? The holding LLC is a manager managed and I am the manager owner. Property LLC is single member managed and 100% owned by the Holding. I am not on the Property LLC. Being the owner and manager of the Holding LLC gives me right to the Property LLC?
You really should be speaking with a CPA if it is setup so complicatedly. I understand the reasoning, but I do not know how you set your structure up so it's hard to advise. If you just apply as a third party designee, you should be fine. There is an option for that when you go on the IRS apply for an EIN website.
Thanks Calvin, I appreciate your concern. You will be surprise what CPA and Lawyers do and don't know. I have tried on multiple occasions and honestly sometime it is better to just ask on here to say the least.
@Mike Jones I agree. If I had seen this thread back when I was setting up my business structure, it would have answered many of my questions. I did ultimately use a real estate attorney for my first LLC and don't regret it because I learned a lot from the process and the way he structured the operating agreement. But I don't think I'll do that each time I buy a property, esp if its in the same state. Not sure if I'd ever use a CPA for this purpose tho.
@Afsheen S.
I am a big believer of free education, and spending time here made me gain a lot of knowledge(free) and answers. I just don't like when people take advantage of others. Forming a single member LLC should cost you an arm and leg, but you will find lawyers charging you $1200-2500. Why???
One told me $1200 just for the formation and $700-1000 if i want an Operating agreement. Well it took me just hours of reading and couple minutes to plug in the info and the LLC was formed. They do the same thing to form these. No miracles. I put Name, address, reg agent etc... done. $1200 Sir. Nohh
Called another honest lawyer and had him review the operating agreement and paid his time.
@Mike Jones You do not need to add the officer position. I just provided that information as a point of reference for the future when putting together your operating agreements. The reason I use the technique is to avoid the convoluted signing process when using a member managed LLC. As to your question about how do you sign with a member managed LLC this is how it is typically handled:
First Base LLC
___________________
By Clint Coons manager of Home Plate LLC as its member manager
Keep in mind this is only one way to sign and others are acceptable.
@Afsheen S. That is great US Bank did not request a local address. You must have found the key person. Working with banks can be frustrating. I have had clients in CA walk into the same BofA branch and opening a WY LLC account depended on who they're working with at the bank.
In general working with banks for WY LLCs it is hit and miss with institutions. I tell people to first find a business banker before attempting to open the account. The first guy who runs out from behind a desk when you enter the bank carrying a bowl of candy is not the guy you want to deal with. Ask when you can schedule a time with their Business Banker. This person typically handles multiple branches so you typically need to set an appointment. You can use your WY address but many want a local address to come preparers to provide a local address. Giving the bank a local address will not impair your anonymity (unless you use your home address and they print it on your checks). Keep in mind this is general advice and anyone can have a different experience.
@Mike Jones You do not need to add the officer position. I just provided that information as a point of reference for the future when putting together your operating agreements. The reason I use the technique is to avoid the convoluted signing process when using a member managed LLC. As to your question about how do you sign with a member managed LLC this is how it is typically handled:
First Base LLC
___________________
By Clint Coons manager of Home Plate LLC as its member manager
Keep in mind this is only one way to sign and others are acceptable.
I'll let Clint give his answer as a lawyer.
As a layman, I would say that both your options are not sufficient as:
1/By John Doe, Member manager of Holding LLC: What is Holding LLC to Property LLC? In what capacity is Holding LLC able to sign for Property LLC?
2/By John Doe, Holding LLC managing member: Who is John Doe to Holding LLC? In what capacity is John Doe able to sign on behalf of Holding LLC?
The party to the contract is Property LLC.
Property LLC managing member is Holding LLC
John Doe is the managing manager of Holding LLC
John Doe physically sign the contract
All these 4 information need to be conveyed to avoid piercing the company veil and make the document legal.
Now it is my understanding that there are many ways of writing this information down, Clint showed you one.
Another option as also mentioned was to have officers of the LLC to keep that chain obfuscated.
I could also envision that you may give a limited power of attorney to an agent to sign on behalf of the LLC. But depending on the contract, you may have to file with it the limited POA proving the agent's authority that would then disclose the chain.
Or you may also have an attorney at law represent the LLC and sign on its behalf. I don't believe in that case that you will have to disclose who is the person who hired the attorney.
@Clint Coons or anyone else: In regards to simplifying the signature, I was wondering what the harm would be in structuring the Property LLC as "manager-managed" with myself being the manager and the Holding LLC being the single member in a state that provides anonymity for both the member and manager. In Missouri, for example, neither the name of the member nor manager is public information. The registered agent would be the only publicly listed person.
This would simplify the signature from:
Property LLC
By John Doe, manager of Holding LLC as its member manager
To:
Property LLC
By John Doe, manager
At the same time, I wouldn't have to reference my Holding LLC each time I sign something for the Property LLC. Would that not be better in terms of asset protection??? Idk maybe I'm missing something. This is one of those questions that I can't get a straight answer on. I recently spoke with a real estate attorney here in Missouri and he said he always structures the Property LLC as "manager managed" even if the only member is the Holding LLC.