When you’re making a major investment, it’s worth taking the time to see how you can protect it. If you’re investing in commercial real estate, you may want to consider using a limited liability company to protect your personal assets.
Being a landlord or owner of a building is not always simple. If someone happens to fall or get hurt on the property, you could be held liable. However, if you do not have an LLC, then your personal assets could be at risk.
Owning property through an LLC allows you to limit your liability. Instead of suing you directly, the person would be using your business. Only the property owned through the business would be at risk over the lawsuit. If you place each commercial property into its own LLC, then only that property would be at risk.
Protect yourself against personal liability
It is important to protect yourself against personal liability and lawsuits from others who are hurt on one of your properties. By purchasing property in your own name, you’ll be held personally responsible for accidents on a property or for debts on the property. Without an LLC, you could be required to use your own personal assets to cover the cost of the property in a foreclosure or if you are sued.
With an LLC, you get to limit your liability while also receiving some federal tax benefits. You won’t have to worry about having your assets frozen if someone sues you or about having to cover their injuries out of pocket. Instead, your property will potentially be at risk or considered a frozen asset until the claim is closed.
Limited liability corporations are an excellent way to run a business while protecting your own best interests. Since you may be investing in multiple properties, it’s smart to talk to an attorney who can help you maximize the protections you have in place. You may need to set up multiple LLCs, or there could be another excellent option for you that you haven’t yet considered. Get to know your options, so you can protect your investments.