LLC to invest as an LP in a Syndication

[Keval Shah]

Hi All,

I had a question in regards to setting up a LLC to invest passively as a LP in a syndication.
The reason for setting up an LLC is to meet the minimum investment amount set by the Syndication. I'll be going in 50/50 with a partner (we are both accredited). The deal is oversubscribed so the largest investments have preference or else we'd invest separately as individuals.

My question is:

1) I'm based in NY, partner based in OH, asset based in UT - should we register LLC in UT or would a OH registered one be fine? Does it matter much apart from the setup costs? Asset protection or anonymity isn't much of a concern for us on this.

2) Would distributions need to go into a LLC owned bank account?

Thanks for your help.

Have posted the question to a CPA as well but also open to any recommendations from forums.

[Ashish Acharya]

Originally posted by @Keval Shah:

Hi All,

I had a question in regards to setting up a LLC to invest passively as a LP in a syndication.
The reason for setting up an LLC is to meet the minimum investment amount set by the Syndication. I'll be going in 50/50 with a partner (we are both accredited). The deal is oversubscribed so the largest investments have preference or else we'd invest separately as individuals.

My question is:

1) I'm based in NY, partner based in OH, asset based in UT - should we register LLC in UT or would a OH registered one be fine? Does it matter much apart from the setup costs? Asset protection or anonymity isn't much of a concern for us on this.

2) Would distributions need to go into a LLC owned bank account?

Thanks for your help.

Have posted the question to a CPA as well but also open to any recommendations from forums.

 1) Doesn’t matter where you form the entity if you are not concerned about asset protection. However, talk to your CPA regarding the states you need to file the tax returns. 

2) no if you don’t care about the legality and asset protection.