Ownership of an LLC is often times a partnership or a group, but it can be an individual as well. Those that are sole owners likely have a lot of responsibilities, especially if they own or are a part of multiple LLCs. It may be extremely beneficial to look into combining the businesses. Talk to a business attorney to learn more about how to buy an LLC with another LLC.
Benefits of One LLC Owning Another
There are a variety of benefits that come with having one LLC as an owner, or part-owner, of another LLC. Here are some of the most common:
Limited Liability – A limited liability company limits its liability when it’s owned by another limited liability company. Get it? Limited liability. Much of the businesses liability is taken on by the owning LLC, which can offer the owned property much more flexibility.
Avoiding IRA Penalties – Declaring your IRA as a part owner in an LLC can be a great idea, but in some circumstances, it could invalidate the IRA. For example, if your spouse owns 50 percent of the LLC, then the IRA could be invalidated, incurring hefty taxes and penalties. However, if you form a separate LLC owned jointly by the IRA and the LLC your spouse co-owns, then you should be safe.
Out-of-State Investors – Often times in business, opportunities will arise where multiple investors are attracted to the same place. These investors could very possibly be from out of state, but if the business venture is limited to one state, merging the various out-of-state investors under one super LLC could make the whole process a lot easier.
Trust Members – As the trustee of a living trust, you will likely be given control over the investments. It is not uncommon for trustees to decide to form one LLC that they own individually, which in turn owns another LLC owned by the other members of the trust. This creates a tier effect popular among trust members because it offers a wealth of estate planning benefits including protection of family assets.
The Monmouth County business attorneys at Garland & Mason, LLC are dedicated to offering the very best service to business owners in Manalapan and the surrounding area.