Question about LLC

**LiL1Penny** · 04-09-2007 10:54 AM

I currently own percentages of 2 LLC's and another business that is not an LLC. I also have quite a bit of money tied up in mutual funds. I know the LLC's protect me from lawsuits regarding the companies.

What I have a question about is does anybody know if I could start another LLC and just put my mutual funds along with the ownership I have of the businesses and any money they make into that LLc that I setup? I am hoping that will protect me and my money from frivolous lawsuits if hypothetically I happen to get in a car accident or something like that and the other driver finds out I have money and tries to sue me.

If this will not work does anybody know of any other way I can protect my money against people looking to get rich quick and take advantage of the system?

**youngmarketplace** · 04-09-2007 11:25 AM

You bet. Along certain lines. this would work. I dont know about your mutual funds, but the llcs and other things can be put in an another LLC or holding company, or a corporation. I mean my Corporation basicily pays for almost everything. Cars, insurance, and can have other LLCs or corporations under it. Mind you the corporation owns everything, but I controll the coperation in terms of shares.

**radreality** · 04-09-2007 12:37 PM

I don't mean to be rude, but why are you asking that type of question on here? A question like that is best suited for your attorney. Please don't tell me that you are a partial owner of some businesses without having an attorney. You might spend $175-$250 per hour of their time, but they are the one that will back you up and represent you in court (heaven forbid), no one on here (even attorney's on here) would do that for you.

**LiL1Penny** · 04-09-2007 12:55 PM

Originally Posted by radreality

I don't mean to be rude, but why are you asking that type of question on here? A question like that is best suited for your attorney. Please don't tell me that you are a partial owner of some businesses without having an attorney. You might spend $175-$250 per hour of their time, but they are the one that will back you up and represent you in court (heaven forbid), no one on here (even attorney's on here) would do that for you.

By no means is this my only course of action regarding this I have many other people and resources to lookup before I do anything.

I do realize that this is a forum and not an actual law office and would never base any business decision solely off anything that was posted on this site.

I basically just posted here so that other people who may run into the same issue or may never have considered it can also learn how to protect themselves. Isn't that what this forum is all about.

Thanks for the concern though.

**jasaunders** · 04-09-2007 01:51 PM

The answer is no. I obviously advise speaking with a lawyer about this, but a LLC must have a specific business purpose. A LLC can not be used solely as an entity to protect personal assets. Along with this, if you do have a LLC, you must keep personal and business finances completely seperate or you risk losing the liability protection a LLC affords you. Most states have very specific laws regulating co-mingling of money in LLC's, so this is something to address with a lawyer.

I have a lot of knowledge of this in regards to Wisconsin state law, as I was involved in a lawsuit for 2 years related to this, so I know the Wisconsin laws like the back of my hand. But they are similiar in most other states.

There are ways to protect some of your assets and certain ways to do them (ie. property trusts), but you need to speak to a lawyer about your specific situation.

**chanson** · 04-09-2007 06:31 PM

Well you can form a corp to hold your ownerships of shares in other companies. Thats basicalyl what large investment firms are doing like KKR & Co. or alot of companies that are Holdings, are so usually because they have several things udnerneath them and are sued as a parent company. Not sure why someone would tell you that you can't unless im missunderstanding the question. Of course a lawyer is your best source.

You can also look into things like Offshore banking for protection of personal assets, your lawyer or accountant would be able to assist you witht his also. keep in mind your bank will not help you with this, because obviously they dont want you to move your money away from them.

**jasaunders** · 04-09-2007 06:58 PM

Investment firms that "invest" in other companies have a specific purpose for their business. A person can create a company that "invests" in other companies and makes investments. However, you can not create an LLC for the sole purpose of protecting personal assets. Well actually, you can, but you probably won't get the personal liability protection you think you are getting in a court of law.

**akula** · 04-09-2007 08:59 PM

Originally Posted by LiL1Penny

I currently own percentages of 2 LLC's and another business that is not an LLC. I also have quite a bit of money tied up in mutual funds. I know the LLC's protect me from lawsuits regarding the companies.

What I have a question about is does anybody know if I could start another LLC and just put my mutual funds along with the ownership I have of the businesses and any money they make into that LLc that I setup? I am hoping that will protect me and my money from frivolous lawsuits if hypothetically I happen to get in a car accident or something like that and the other driver finds out I have money and tries to sue me.

If this will not work does anybody know of any other way I can protect my money against people looking to get rich quick and take advantage of the system?

yes, that's called asset protection

no, the scheme you're suggesting won't work

yes, there are other ways protect assets - mainly using trusts