How to Use Limited Liability Companies & Limited Partnerships. Garrett Sutton

      

      A SuccessDNA Nonfiction Book

      Copyright 2001, 2004, 2009, and 2017 by Garrett Sutton. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopied, recorded, or otherwise, except in the case of brief quotations embodied in critical articles or reviews, without the prior written permission of the publisher. For more information, write Success DNA, Inc., 2248 Meridian Blvd., Suite H, Minden, Nevada 89423 or visit www.successdna.com.

      SuccessDNA, Inc.

      SucccessDNA is an imprint of Brisance Books Group

      COPYRIGHT 2001, 2004, 2009, and 2017 Garrett Sutton

      All Rights Reserved

      10 9 8 7 6 5 4 3 2 1

      Library of Congress Control No:

      ISBN No. 978-1-944194-15-4

       is a registered trademark of Success DNA, Inc.

       This publication is designed to provide general information regarding the subject matter covered. Because each individual’s legal, tax, and financial situation is different, specific advice should be tailored to the particular circumstances. For this reason, the reader is advised to consult with his or her own attorney, accountant and/or other advisor regarding that individual’s specific situation. The author has taken reasonable precautions in the preparation of this book and believes that the information presented in the book is accurate as of the date it was written. However, neither the author nor the publisher assume any responsibility for any errors or omissions. The author and publisher specifically disclaim any liability resulting from the use or application of the information contained in this book, and the information is not intended to serve as legal, tax, or other financial advice related to individual situations.

      012017

       For Mom and Dad

       Thanks for everything.

      Contents

Acknowledgements

Introduction

Chapter One

       Entity Selection

Chapter Two

       Entity Formation

Chapter Three

       Entity Management

Chapter Four

       Entity Taxation

      Chapter Five

       Capital Contributions, Ownership and the Securities Laws

      Chapter Six

       The Importance of Following the Formalities

      Chapter Seven

       Asset Protection

      Chapter Eight

       Single Member LLCs

      Chapter Nine

       Estate Planning and LLCs/LPs

      Chapter Ten

       Real Estate

      Chapter Eleven

       Joint Ventures and LLCs/LPs

      Chapter Twelve

       Intellectual Property and LLCs/LPs

      Chapter Thirteen

       Series LLCs

      Chapter Fourteen

       Admission, Withdrawal and Expulsion of Members/Partners

      Chapter Fifteen

       Transfers of Membership and Partnership Interests

      Chapter Sixteen

       Entity Dissolution

      Chapter Seventeen

       When Not to Use an LLC/LP

      Chapter Eighteen

       Entity Conversion

      Chapter Nineteen

       Bankruptcy

      Chapter Twenty

       Special Situations – Divorce, Limited Liability Partnerships and Limited Liability Limited Partnerships

      Chapter Twenty-One

       Comprehensive Strategies Made Easy

      Conclusion

      About the Author

      Index

       Acknowledgements

      For the fourth edition of this book I would like to thank our dedicated staff members at Corporate Direct for their assistance in all matters towards creating this book. As well, I would like to thank Lori Ream of ProVision for assistance on the taxation chapter and James Burau, Esq. for help with the estate planning chapter. The editing skills of Scott Cooper are also greatly appreciated.

      Also, thanks are offered to my wife and children, Jenny, Teddy, Emily and Sarah for their patience as this book was being written.

       Introduction

      Congratulations. You are about to learn powerful legal strategies used by the rich for generations to protect their assets and operate their businesses. By reading this book, you will come to understand the concepts necessary to establish a customized strategy for the protection of your business and personal assets and to create your own legal defense against the improper threats and claims of would-be creditors. You will learn when and how to use Limited Liability Companies and Limited Partnerships both in specific situations and in general business scenarios. And you will learn a mantra and attitude that the rich have successfully used for hundreds of years – protect and grow. How to protect and grow your assets through the strategic use of Limited Liability Companies, Limited Partnerships or Corporations is one of the greatest skills you can acquire.

      The journey begins with a consideration of the entities you can use to your maximum advantage.

       Chapter One

       Entity Selection

      This book is designed to explain how and when to use two of the most popular and powerful business entities available today. As you go through the book you will learn that both Limited Partnerships (LPs) and Limited Liability Companies (LLCs) offer the advantages of:

       • Limited liability

       • Protection from creditors

       • Retained management control

       • Family wealth transfers

       • Transfer restrictions

       • Flow Through Taxation

       • Flexibility

      The question of when to use either an LP or an LLC will be discussed first in this chapter where we will review scenarios for each entity. Later chapters employ a question and answer approach as well as scenarios to deal with