I was at a REI investment seminar today and it was mentioned that you should never have your name in the name of your business - in the line of being "asset protection". You should not use your name (first and/or last) in the name of your business (LLC, corporation, etc.) We were given the reasoning that you have a linkage between the business and yourself personally. It may therefore connect the company to you personally when a legal action is taken against the company.
Can just a name connect you personally to the LLC/Corporation and make you liable? Doesn't not make sense to me.
I can't imagine there's a legal basis for Your Name LLC causing you to incur personal liability per se. What if you just use your initials? Or a nickname? I'd also like to know if anyone has an answer to this. What about Joe Blow Realtor PA as well?
Your name is already connected to your LLC. You are a managing member, are you not?
What a bunch of guru gobbledygook. While you may want to position your self as the "manager" and not the owner with your tenants, this can be hard to do if your name is in your company's name. However from a legal standpoint this will have ZERO bearing on your liability.
You may be personal liable for other reasons but not because your name is in your company name.
Thank Ned for your insight as I have not set up an LLC or Corp as of yet. Could this be that you are personally easier to track so that a keen lawyer can find what assets you have to base a lawsuit amount? i.e. - am I worth suing? This is the only other factor I thought of after I posted this thread last evening.
@Dan Perrott how you name an LLC has no effect on a lawyer's ability to pierce the corporate veil. You will be fine. If this were the case, you wouldn't have accounting, venture cap, and private equity firms naming the LLC after the founders/partners.
Originally posted by @Dan Perrott :
Thank Ned for your insight as I have not set up an LLC or Corp as of yet. Could this be that you are personally easier to track so that a keen lawyer can find what assets you have to base a lawsuit amount? i.e. - am I worth suing?
It would only be a help with a bad or lazy lawyer. If you have mortgaged any property, all I have to do is look up the Mortgage or deed of trust and see who signed for the company. This is one of many ways to figure who owns a company.
Despite what the Gurus say I don't think Lawyers spend a lot of time looking up to see if there are assets worth suing over. That is more work than just filing a case.
I am not saying privacy is not worth attempting , it will keep perhaps tenants and nutcases off your back. But don't fool yourself that it is perfect protection from someone serious about their job.
Join the Largest Real Estate Investing Community
Basic membership is free, forever.