Tag Archives: Business Solutions

LLC vs. Individual – Rental Property Owner

 LLC vs. Individual – Rental Property Ownermeter

Should you form an LLC if you own rental property? The decision to form an LLC is complicated and each landlord’s situation is different. The first LLC came into existence in the U.S. in 1977 in Wyoming, since then all 50 states have enacted LLC legislation.  Here are some pros and cons to  help you decide if an LLC is right for you.

PROS

  • Protect your personal assets from lawsuits: If someone sues you when set up as an LLC, your personal assets are protected. Only the LLC’s assets are at risk.
  • Pass-through taxation: Pass-through taxation is an IRS related ruling allowing LLC profits to be passed directly to the owner. Taxes are paid on by the individual, avoiding double taxation.
  • Easier management responsibilities: LLCs are much more easily managed than corporation or partnerships and many states offer reduced fees.

CONS

      • It costs money to set up an LLC: You can set up an LLC with the State Corporation Commission and pay a small fee. Many people choose to use an attorney or hire a services company. These options cost from a few hundred to a few thousand dollars.
        • Keep your money separate: It is important that you never mingle your LLC money with your personal money. The slightest infraction could cause a litigant to claim the LLC is not a separate entity, causing you to lose any LLC protection.
  • Mortgages can complicate: If you already have a rental dwelling with a mortgage on it, changing to an LLC could look like a sale to your mortgage company. If you have a due-on-sale clause in your mortgage it may cause the mortgage company to require payment in full.

 

The decision to form an LLC is complicated and each landlord’s situation is different. Consider the above information and consult with your CPA or attorney to see if an LLC benefits you. Then let the experts at Cobb-Hall provide insurance solutions designed specifically for your needs.

Key-Person Insurance

Key Person Insurance Can Prevent Financial Disaster

The financial effect of losing an important member of your business can be extreme. If your company business travellers walking in airport with luggagelost key people because of injury, disability or death, there’s a chance that the company could close it’s doors for good.  Investing in key- person insurance can keep your company from financial ruin if that employee was suddenly unable to continue to work.

Key-Person Insurance provides specific monetary value, agreed upon when the policy is purchased, for a specific time period or until the employee is no longer in the capacity of a key person.

 In the event a key employee dies suddenly or is incapacitated and unable to do their job, this coverage can protect your company, the employee and the employee’s family by providing:

  •  financial support while the person is recovering from an illness or injury
  • closing costs, investor payoffs, and severance pay for employees if your business plans to shut it’s doors after the loss of a key person
  • cover costs for temporary staff
  • hire and train a replacements
  • make up for a temporary loss of profits

Contact the experts at Cobb-Hall Insurance for innovative solutions to your business needs.

 Excerpts from 2017 Consumer Agent Portal LLC, All rights reserved