Forming Limited Liability Companies (LLCs) for Investments

By Jennifer Reuting, author of Limited Liability Companies for Dummies™

Question:

I'm reading your book with great interest since I have several ideas for starting companies which seem to be a perfect match for an LLC. One scenario that I have a question about though is I'm going to be investing a reasonable amount of money (in addition to providing a loan) in someone else's company to help him out with startup capital. I wasn't sure if it would be appropriate and/or beneficial to create an LLC myself for the purpose of having my company invest in his and holding the loan or just doing this as a personal transaction with his company. By the way his business is in Maryland. What are your thoughts on this? Thanks very much for your time.

Answer:

A lot of investors form Limited Liability Companies (LLCs) for the purpose of making investments. They use the LLC to help protect personal assets; this is important especially if the investment involves debt. You may also want to think about filing the LLC in a tax haven state. You can go to our page on Which State to Form LLC to learn more about what state to form your LLC in.

Order Limited Liability Company

* If you have difficulties using the order form on your smartphone, try turning your phone sideways for a wider display.

Select Your State:

Disclaimer: This information is made available by MyLLC.com, Inc. (the "Company"), and is intended for educational purposes only, and it is not legal or tax advice. No action should be taken in reliance on any information in or on this site without verification with legal or tax counsel, after review of the facts and current law, that the action to be taken is appropriate under the circumstance. Except as expressly provided to the contrary in writing by the Company, the materials contained on this site are provided on an "as-is" basis without warranties of any kind, either express or implied. Company disclaims all other warranties, express or implied, including, without limitation, implied warranties of merchantability, fitness for a particular purpose, title and non-infringement as to the information, content and materials on and in the site. Company does not represent or warrant that materials on and in the site are accurate, complete, reliable, current or error-free.

Forming Limited Liability Companies (LLCs) for Investments

Question:

Answer:

Select Your State:

Need Advice? Ask us Anything!