Legal Question in Real Estate Law in Ohio

Re: Protecting my assets

Dear Inquirer:

Consider holding the real property in a corporation, or LLC - Limited Liability Company - essentially a corporation in Ohio, with great protection afforded to the Members of the LLC.

Corporation Basics.

A corporation is a form of business created according to the laws of a specific state or country. It is an artificial entity created by law. The corporation is recognized by the law as a separate and independent entity from the individuals. In other words, the corporation is not you and you are not the corporation. The corporation is generally treated as if it were its own person, inasmuch as the corporation also has certain rights separate from any other person.

The limited liability company or LLC, is a relatively new development in business law. An LLC is an entity that is also legally separate and distinct from its owners. For tax purposes, the LLC is usually treated as a partnership. However, the LLC may elect to be taxed as a corporation if it so prefers. This choice makes the LLC a very flexible option for doing business. Depending upon the circumstances, the partnership tax classification may provide certain advantages or disadvantages. The partnership tax classification avoids double taxation, but you might find yourself paying tax on company income at a ridiculously high personal income tax rate instead of at a lower corporate rate.

One key advantage to the LLC is the lack of restrictions regarding the type and number of stockholders. To appreciate this flexibility, compare the LLC with using a restrictive S-Corporation. The S-corporation, which also provides corporate liability protection and flowthough tax status, has limitations on both the number and type of shareholders that are allowed. But the LLC is not subject to restrictions on ownership that apply to an S-corporation. Most trusts, estates, corporations, partnerships and other LLCs are prohibited from owning stock in an S-corporation.

The LLC�s greatest advantage is flexibility. It does not require the same degree of formality and record keeping that is demanded of a corporation. It has flexibility in its tax status, it provides solid asset protection benefits; and when your LLC is filed in a state where the law limits a judgment creditor only to a charging order remedy, it becomes the ultimate business entity for many applications and uses.

Consult an experienced Attorney to guide and assist you. Good luck>

Sincerely, J. Norman Stark

Good luck!