License or not to License

ben2go · #1 04-09-2008, 02:20 AM

Some friends of mine recently fell for a TV info commercial scam.They were told to incorporate into an LLC using their last name.Something like Smith,LLC.Then they could circumvent their bad credit and obtain real estate for investment purposes.I know every state is different(we're in SC) ,but would this not require some type of license,real estate,property management,and/or brokerage?I had thought of this but have not researched it.

flippinout · #2 04-09-2008, 02:18 PM

Quote:

The limited liability company (LLC) is a business entity that offers limited liability protection and pass-through taxation. An LLC can be managed by either the members or by managers.
The LLC allows for pass-through taxation as its income is not taxed at the entity level; however, a tax return for the LLC must be completed. Any income or loss of the LLC as shown on this return is passed through to the owner(s). The owners, also called members, must then report the income or loss on their personal tax returns and pay any necessary tax.

By: Biz Filings

Let me know if you need any further information ben and I will find it for you.

Read more here

ben2go · #3 04-09-2008, 05:50 PM

I understand how an LLC works.My question is, if you form an LLC to do business in real estate,do you have to have a realtors,brokers,and/or property management license?BTW,I have an LLC.Business has stopped for me right now.I have some health issues.

badmomma · #4 04-09-2008, 06:17 PM

Here is a place that may have some useful information.
It pertains to what you are asking and has some information
about taxes and such related to using a corporation to buy
real estate.

Use LLC for Real Estate Investments
By John Huddleston

John Huddleston
Level: Platinum

Quote:

It is generally best not to have your corporation purchase real estate. If your company is a C corporation, your company will pay tax when the building is sold. In order to get those profits in your hands, you will have to pay yourself a dividend. This dividend is taxed again. So you are paying taxes twice on the gain from the building sale.

JaredfromIndiana · #5 04-09-2008, 11:07 PM

Quote:

Originally Posted by ben2go

I understand how an LLC works.My question is, if you form an LLC to do business in real estate,do you have to have a realtors,brokers,and/or property management license?BTW,I have an LLC.Business has stopped for me right now.I have some health issues.

No. I have had an S Corp for almost 3 years and have never had a real estate license.

flippinout · #6 04-10-2008, 03:40 AM

I am so glad you answered that Jared. Thank you.

Do you have to have any other licenses or anything special you need to do to get the LLC started? And, I wonder if each state has different rules on what you have to do and licensing etc?

I will have to find out what it takes here in Ohio in respect to starting one, and whether or not it takes anything special to do so. I will let you know what I find out.

JaredfromIndiana · #7 04-10-2008, 11:36 AM

Quote:

Originally Posted by flippinout

I am so glad you answered that Jared. Thank you.

Do you have to have any other licenses or anything special you need to do to get the LLC started? And, I wonder if each state has different rules on what you have to do and licensing etc?

I will have to find out what it takes here in Ohio in respect to starting one, and whether or not it takes anything special to do so. I will let you know what I find out.

All you need to start a LLC is a little money and an attorney. I think I formed mine for around $200 or so.

flippinout · #8 04-10-2008, 03:41 PM

What are the advantages for you to have an LLC? Could you expand on this subject? Tell us why you think having one is useful and how it helps you? We would appreciate a personal point of view on this issue. Thank you Jared.

JaredfromIndiana · #9 04-10-2008, 05:24 PM

I'd love to tell you that the reason I picked an S Corp is because of how intelligent and knowledeable I am...

But... I formed an s corp because that's what my mentor told me to do! Over the years I have heard everybody tell me that I did the right thing, so I guess I did. Here is an article I found that explains it much more than I could..

http://www.ready4business.net/llcvsscorp.html

badmomma · #10 04-10-2008, 06:05 PM

Thjnk you Jared, I personally have no experience
in this area. I have a registered business name but
we aren't doing anything due to the immediate need
for a regular income. Getting a business going requires
capital and we have none to spare. I am happy to see
that you know what to do and am very glad that you
are able to answer bens question.