Without more specifics, it's probably too good to be true. I guess the author may be right if a valid business purpose is there though. Otherwise, it may be a fraudulent transfer and thus disregarded.
If you're lending money to a LLC, you'd get a note in return, which would be available to the creditor in a judgment.
Better yet, just transfer money to a LLC/LLP (a legit family limited partnership drafted by a qualified attorney). The LLC/LLP's assets are protected. A judgment creditor could obtain a charging order against your interest in the LLC/LLP, but they would only have a right to distributions ... and the general partner/managing member (probably you) gets to decide when to make distributions. Effect: you're in a much better negotiating position should you get sued.
Just don't do any of this if a claim or judgment is imminent. If you do, the fraudulent transfer act applies.
How can I transfer property to an LLC in exchange for units? I understand the basic concept, but not how this would be reported as far as the accounting aspect. Is it on the company accounting books (if so, how?) or internal records (such as the Operating Agreement).
Without more specifics, it's probably too good to be true. I guess the author may be right if a valid business purpose is there though. Otherwise, it may be a fraudulent transfer and thus disregarded.
If you're lending money to a LLC, you'd get a note in return, which would be available to the creditor in a judgment.
Better yet, just transfer money to a LLC/LLP (a legit family limited partnership drafted by a qualified attorney). The LLC/LLP's assets are protected. A judgment creditor could obtain a charging order against your interest in the LLC/LLP, but they would only have a right to distributions ... and the general partner/managing member (probably you) gets to decide when to make distributions. Effect: you're in a much better negotiating position should you get sued.
Just don't do any of this if a claim or judgment is imminent. If you do, the fraudulent transfer act applies.
Great points! Thank you.
How can I transfer property to an LLC in exchange for units? I understand the basic concept, but not how this would be reported as far as the accounting aspect. Is it on the company accounting books (if so, how?) or internal records (such as the Operating Agreement).
Desiree