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  1. #1
    Join Date
    Jul 2007
    Posts
    2

    Default What Protection Does An LLC Give To Multiple Ventures

    I live in MD.

    I have a rental property, which i would like to setup as an LLC to protect myself from any potentail law suites from tenants, etc. Looking at the LLC form for the MD state, there seems to be nothing to it!!! I do have a general question about LLC.

    Lets say I have 2 businesses, one is a rental business, and the other is selling "how to" info on the net. I set an LLC for my rental (call it Mike's LLC) but not the interent business.

    My question is, how can one tell which of the 2 businesses is actually protected under this LLC? The form does not specify what kind of business the LLC is being setup for? It just asked fro a name and the rason the LLC is being setup.

    Is it simpy by the name of the LLC, if the name of the LLC matches the name of the business? Or is it by the bank account of the LLC? If all the money from the renatl goes to a specifc bacnk account setup under Mikes LLC, than one would know that's all the money this business has?


    Can u please clarify.

    Thanks.




    Later someone sues me on my wholesale business.

    Since the LLC application (atleast in MD) does not specify what type of bussiness the LLC is being setup for, and the LLC name is so generic, How can one tell which business is being protected by the LLC?

  2. #2
    Join Date
    Jul 2007
    Location
    Florida
    Posts
    2,344

    Default Re: How does LLC cover your business?

    Most articles of incoporation also allow any and all legal business for a coporate entity, so that isn't much different than the article of organization of an LLC having similar language. When business is conducted it is conducted in the name of some entity - either an individual, partnership, LLC, corporation of some other type of entity. The name under which the business is conducted determines who is liable if someone seeks compensation for a tort or other wrongful act.

    Limited liability is not perfect for either an LLC or corporation. For example, pretend you are in the business of building cinder block walls. Let's say you personally lay the blocks for a wall as "Joe Smith Construction, Inc." and are paid in that name. Fred Q. Public walks by your wall, the wall falls on him, and kills him. Neither the LLC or coporation will help you. You cannot require Fred's widow to sue your legal entity. She can sue both the business entity and you personally, because you personally built the wall. But, to the extent that there is limited liability (for example, if one of your employees built the way), that limited liability only applies to business (transactions) conducted in the name of that legal entity.

    Hope that helps some.

  3. #3
    Join Date
    Jul 2007
    Posts
    2

    Default Re: What Protection Does An LLC Give To Multiple Ventures

    Thanks for the reply Jimmy -- You said:

    "When business is conducted it is conducted in the name of some entity - .......The name under which the business is conducted determines who is liable if someone seeks compensation for a tort or other wrongful act"


    So in my example with 2 businesses one being an internet business and one a rental business, I could run both businesses under the same LLC as long as I ask my tenants and my internet clients to make all checks payable to "Mike's LLC" .. meaning I am conducting both businesses under the same LLC.. does this mean i am protected if either business gets sued?

    This is confusing to me!

    Thanks again.

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