For Orange County business-minded individuals, owning real estate could be a lucrative and satisfying endeavor. One of the primary concerns of anyone in this position is protecting themselves and their investments. One way in which to do this is to form a limited liability company for each development.
The first reason to put property into an LLC is for the personal liability protection. Under most circumstances, an Orange County developer could avoid personal liability for the debts, lawsuits and more. Even those who already know the benefits of creating an LLC may wonder why it would be beneficial to do so for each property owned.
Consider what could happen if all of an owner's properties were held under the same LLC and someone filed a lawsuit against the company. All of the properties would be at risk. With a separate LLC holding each development, anyone who would come after the company could not easily reach the individual or individuals, or other properties owned by them, if at all. Each LLC would have its own bank account, pay its own taxes and hold its own assets as long as it remains in good standing with the state.
Protecting each development should remain a priority. Keeping them as separated as possible would help accomplish this goal. Other than forming an LLC for each property, other rules must be adhered to in order to maintain the maximum benefit possible. For instance, commingling funds could undermine what the property owner is attempting to do. A developer who wants to take advantage of this type of arrangement should take the time to gain an understanding of how to best take advantage of the available benefits.