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Investor Notes On LLC In Nevada Ken Angst
One of the most common ways to protect your investment property is to form a Limited Liability Corporation (LLC) and hold the title to your investment property within the LLC. Nevada law allows an individual or group to form an LLC for any business purpose. Nevada courts have determined that real estate investments qualify as a business purpose. Once the LLC is formed, Nevada's indemnification statutes provide that a person is not liable on the debts or liabilities of the LLC if he/she "acted in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the corporation" (NRS 78.752). Thus, the Nevada LLC laws have become a powerful tool for accomplishing asset protection for real estate investment properties.
Further, Nevada laws provide a blanket protection of the LLC’s “corporate veil.” Under Nevada statute, a member of a Nevada LLC "is not a proper party to proceedings against the company" (NRS 86.381). Thus, an individual forming a business in Nevada is personally protected against any lawsuit filed against the LLC.
Why is this important? You own rental property where a person (not necessarily a tenant) slips and falls on the property. This person files a lawsuit against you personally. Pursuant to NRS 86.381, you will be dismissed from the lawsuit as an “improper party”. This is important since it keeps your personal finances and your family’s finances away from a lawsuit which can only be filed against your LLC. Again, owners are completely protected from the LLC's liabilities. Clearly, the LLC is the most flexible and convenient way for owning rental properties while achieving financial protection.However, I highly recommend you speak with your real estate attorney about what is the best way to protect your real estate investments based on your own individual circumstance.
Kenneth Angst embodies hard work, high energy, honesty, and elite service marketing throughout your real estate transaction. Born and raised in Northern Nevada, Ken is a proud native Nevadan. He has ....