IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE IN AND FOR NEW CASTLE [Adobe PDF]Partnership Act (DRULPA) provides a limited partner the right to inspect First Real Estate Inv. Partners, L.P., 806 A.2d 165, 174 (Del. Ch. more hits from: http://courts.delaware.gov/opinions/(0rhndg2zsief0nr1lmsw2wa5)/download.aspx?ID=62790 ::
Partnership Act (DRULPA) provides a limited partner the right to inspect First Real Estate Inv. Partners, L.P., 806 A.2d 165, 174 (Del. Ch.
http://courts.delaware.gov/opinions/(0rhndg2zsief0nr1lmsw2wa5)/download.aspx?ID=62790HOME |
Three Reasons to Use a Limited Liability Company or Limited
Partnership for Real Estate Investments
After searching the market for the perfect piece of real estate, you have found property that will satisfy your needs and give you future opportunities. It is now time to be concerned about protecting yourself from the risks involved in property ownership. One way to reduce such risks is to hold the property though a limited liability entity. By choosing the entity best suited to your specific situation, you will ensure that you have the flexibility and control that you need.
Although other limited liability entities are available, for the following reasons, the preferred entities for real estate investments are the limited liability company (LLC) and the limited partnership (LP):
Laws, Acts, and Legislation::
holds legal title to or a beneficial interest in real property located within or prosecuting authority and the reasons for entering into the agreement.
http://www.legislature.state.oh.us/bills.cfm?ID=125_HB_227HOME |
The Use of Public Limited Partnership Financing in Agriculture for [Adobe PDF]the major, if not sole, motivation for investing in a limited partnership. any personal liability (as in the case of a mortgage on real estate acquired more hits from: http://www.aae.wisc.edu/fsrg/publications/mono1(2).pdf ::
&the major, if not sole, motivation for investing in a limited partnership. any personal liability (as in the case of a mortgage on real estate acquired
http://www.aae.wisc.edu/fsrg/publications/mono1(2).pdfHOME |
• Limited Liability – As in any business transaction, one of your primary concerns in real estate investment should be your vulnerability. Owning property as an individual or in a general partnership creates unlimited liability. Tenants, guest, and, in some cases, trespassers may sue you for real or imagined grievances. If they prevail, they may seek to use your bank account, home, and personal possessions to satisfy they court’s judgments. By using a LLC or LP for real estate investment, you may be able to avoid personal liability for accidents that occur on the property. Liability will be limited to the extent of the LLC’s or LP’s assets. If anything goes wrong on the property, you will appreciate the protection limited liability provides.
• Beneficial Management Structure – Depending upon your specific situation, either a LLC or a LP may provide the management structure you need. A LLC provides a flexible structure that allows members to manage the entity or to elect a manager or a group of managers. All members of a LLC are provided limited liability. Additionally, many states allow one person to form a LLC. LP’s, however, require at least one general partner and one limited partner. The general partner is personally liable, but that may be handled by forming a corporation or LLC to serve as general partner, thus encapsulating any liability in a protected entity. When you use a LLC or LP for real estate investment, you may also benefit from estate planning and gifting opportunities available.
Ohio Association of REALTORS::
The words Realty or Real Estate or the authorized use of a trade name or estate, partnership, limited partnership, limited liability company, association,
http://www.ohiorealtors.org/absolutenm/templates/?a=3179&z=31HOME |
Nevada Traders::
limited partnerships (LPs), limited liability companies (LLCs), limited Insurance companies. Non-Profits. Real Estate Investment Trusts (REITs)
http://www.traderstatus.com/nevada.htmHOME |
• Reduced Taxation on Appreciated Property – Although the structure of a corporation may be familiar, corporations are undesirable for real estate investments. If you hold real estate in a LLC or LP and later decide to sell the property to some third party, the tax benefits or using an LLC or LP will become apparent. Unlike a corporation, LLC’s, LP’s, and Subchapter S corporations allow flow-through tax treatment. Profits are only taxed once, while they are taxed twice in a corporation. Appreciation on the property will result in less tax in an LLC, LP, or Subchapter S corporation than in a regular C corporation. In addition, a LLC or LP will provide benefits if you transfer the property to your personal use or the personal use of one of your LP partners or LLC members. Unlike either a C corporation or a Subchapter S corporation, such a transfer to personal use would not result in tax consequences in a LLC or LP. Although other entities may provide limited liability, the tax consequences of using other entities make an LLC or LP preferable.
This material is based upon attorney Garrett Sutton’s best selling book, “How to Use Limited Liability Companies and Limited Partnerships” (SuccessDNA, 2004). For more information visit www.successdna.com and www.sutlaw.com .
This document is distributed for informational use only; it does not constitute legal advice and should not be used as such.
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Three Reasons to Use a Limited Liability Company or Limited Partnership for Real Estate Investments