I am an Arizona attorney who has formed over 2,100 Arizona limited liability companies. One of the reasons I created my website and this blog is to inform people about the importance of operating businesses and holding investment real estate in a LLC.
The primary reason to form an LLC is asset protection. The general rule of Arizona law is that the owners and managers of an Arizona limited liability company are not liable for its debts and obligations. This is exactly the opposite rule of Arizona law applicable to businesses operated as sole proprietorships or general partnerships and investment real estate owned by people in their own names, i.e., 100% liability for everything that goes wrong. The following article is written by a Georgia attorney who agrees with me on this issue.
Big Canoe Law School: “Owning assets without holding them in an LLC (i.e., a limited liability company) is like driving without your seatbelt on. In an old jeep. With no top. And no doors. And no roll bar. Yippe-yi-yo-ki-yay, right? The deal is this: under GA law, a judgment creditor—someone who has sued you and won—can reach your assets, take them and sell them, or do a bunch of other things with them. They can do this until they get enough to cover the amount of the judgment against you.”
For more about Arizona limited liability companies, see my Arizona LLC Law Library.
Related posts:
- Personal Guaranty’s & LLC’s
- Why Form an LLC?
- People in Control Are Personnally Liable for Unpaid Payroll Taxes of Companies
- Arizona LLCs Are Four Times More Popular Than Arizona Corporations
- Must an Arizona CPA form a PLLC?
- Asset Protection Strategies for Your Business
- Beware of Parent – Subsidiary LLC Structure
- Why Not Form a New Business as an LLC?
- Should a Canadian Hold U.S. Real Estate in a Corporation, LLC, LP or LLP?
- How Do I Get Real Estate into My LLC
Recent Comments