Questions? Email our Super Hero Support Team and Darius 

at:  wealthtraininghelp@gmail.com

       Turning: $20 to $5,000 Program            Wealth Building LLC          Texas Houses for Pennies        Tax Lien Investing          Free Stuff            Become An Affiliate

http://www.isopolifonia.com/Additional/images/home_icon.jpg

 Back to Home Page

 

   

      flipping houses and   

      short sales!

 

wholesales, Flips & short sales With $20!

Customer Comments

One-On-One Consulting

 

d

     SLASH Taxes & Build  

     Wealth

 

The Wealth Building LLC

Incorporate for Wealth

Customer Comments 

Retire Rich IRA

d

 

      Texas Tax Sale   

      Investing

 

Texas Houses for Pennies

FREE Texas Tax Deed Seminar

Texas Tax Deed Research Center

Customer Comments

One-On-One Consulting

 

d

      Tax Lien Investing &  

      training

 

Tax Lien investing course

Tax Lien Research Center

Customer Comments

One-On-One Consulting

 

d

     Tax Lien and Tax 

     Deed Listings

 

All 50 States and D.C.!

FREE 10 DAY trial OFFER 

Learn More Today!

LOG IN - ACCOUNT REQUIRED

 

d

       1% Investor MIND -  

       Course

 

Investor Mind Course

Your Greatest Truth BOOK

 

d

 

     Research  Systems &   

     Other courses

 

Title Research Training Course

Tax Lien and Deed Software

Cash Flow Analyzer Software

 

 

      Free Information

 

FREE Articles, Audio and Videos

 

 

      About Us

 

 

Who is Darius Barazandeh?

100% Satisfaction Guarantee

Contact Us Today!

 

 

Link Partners

Small Business & Accounting

 

 

 

Learn More>>

 

 

 

 

 

 

Understanding Corporations, Limited Liability Companies (LLC’s) and Limited Partnerships

By: Darius M. Barazandeh, Attorney at Law / M.B.A.

The best way to understand a corporation, limited liability company (or even a limited partnership) is to realize that each creates a special legal relationship or privilege between the business owner(s) and the government. These areas of government include:

  1. State Government (including state taxing authorities and the state court system)
  2. The Federal Government (specifically the IRS and the Bankruptcy court system)

You may be saying, alright Darius, I still don’t understand what you mean by a relationship or privilege. The best way that I can put it is this:

A business entity is a legal relationship which allows for certain privileges. When teaching people about entities, I like refer to an often forgotten fact: In England during the colonial period the ability to create a corporation required an exclusive grant (i.e., permission) from the Crown (that’s right the King or the Queen!). Remember a business entity is a privilege!

HERE IS ANOTHER TIDBIT:  Did you know that when the original 13 colonies were established, many were actually corporations or similar form. For example, the Maryland Company was used to settle and develop…you guessed it, the State of Maryland. Other examples include, the Virginia company, the Massachusetts company and others. Why would someone use an entity to explore and colonize the New World? The reason is that colonization and exploration were risky investments. Ships were lost at sea, diseases ended the lives of thousands, and a host of other risks were present with each expedition.

By setting up these expeditions as corporations investors could contribute money but were only be liable for the amount invested. In other words, these early arrangements promoted exploration, development, and commerce by limiting liability for investors. The same reasoning is true today. When liability is limited to what you contribute to a business, people are more likely to start businesses. THE REASON: Less risk if everything goes wrong BUT more to GAIN when things go RIGHT!

The point of these historical facts is to make it clear that the purpose of a business entity is to limit the liability of owners/investors to the amount contributed to the business. These facts should also make you realize that liability protection is a privilege. 

Why Should you be concerned 

about liability protection?

I am not here to scare you…but use common sense. Real estate businesses require you to deal with numerous parties, including: tenants, sellers, partners, investors, lenders, management companies, independent contracts, employees, and others. The more parties you deal with the more likely it is that something may not go as planned.

The first step is to learn how to run your business in fair and careful manner…so that you reduce the chances of getting sued. Always remember this: A business entity (LLC, corporation or limited partnership) is not an excuse to act in a careless or negligent manner. You need to be fair when dealing with all parties and you need to outline agreements with partners, vendors, contractors, etc. You need to respond to tenant’s complaints regarding rental property. In short you need to become a MASTER good business practices. I spend a considerable about of time in my courses covering a topic I call ‘Lawsuit Avoidance 101’. This means that we teach you good business practices to help you reduce the risk of getting sued. It’s simply so important!

Another issue to keep in mind is that since you will be dealing with tenants, sellers, partners, investors, lenders, management companies, independent contracts, employees, county agents, you may get into the position where you will need to assert your rights. In other words, you may need to take another person to court, because your rights have been violated, a contract has been broken, or money has not been paid to you. Many times when you assert your rights, you may then be sued by the party you are taking to court. I know this sounds harsh…but it happens! This is called a ‘cross claim’ and it means that the party who is being sued is now also suing. Usually this happens because the other party’s attorney believes that they have a claim and/or they will be in a better position using a cross claim. Basically this means that for you to assert your own rights, you may risk getting sued.

ALWAYS REMEMBER THIS: There are also steps you can take to allow more chances for a pre-lawsuit settlement. This makes the lawsuit truly a last resort. Ask this question: Do you have alternative dispute resolution clauses in your agreements? Obviously, if you can settle matters outside of court via an alternative dispute resolution method, then may be a big advantage and a savings of time and money. An alternative dispute resolution clause will require parties to work at settling a claim through mediation or another non-litigious (and less expensive) manner. Again, a lawsuit should be the absolute last resort. We cover all of these areas in more detail for investors because it something that most people and even some attorneys leave out!

There are also tax advantages and disadvantages to recognize when selecting an entity for your business. We will discuss these in later articles.

To learn more about which entity may be best for you and how to create, run, and maintain an ‘iron clad’ LLC or corporation, you don’t need a grant from the King or Queen…but you should see Mr. Barazandeh’s, Wealth Building LLC and Incorporate for Wealth™ courses.

To learn more about business entities, tax choices and avoiding risk, please listen to our free AUDIO SEMINAR! (no downloads required!)

I want to wish you the best of luck in your endeavors and email me if you ever need help!

If you plan to invest in Texas please see: Texas Houses for Pennies

 If you plan to invest in tax lien certificates states, please see: The Attorney's Step-by-Step Guide to Investing in Tax Lien Certificates 

                 ______________________________________

Information contained within this article was not intended to be, nor should it be taken by the reader as legal, financial or tax advice. The above article was written for educational purposes only.  If the services of a Texas attorney are desired please contact Mr. Barazandeh or seek the services of another attorney.

 

 

EVERY EFFORT HAS BEEN MADE TO ACCURATELY REPRESENT OUR TRAINING SERVICE AND ITS POTENTIAL. HOWEVER, THERE IS NO GUARANTEE THAT YOU WILL EARN ANY MONEY USING THE TECHNIQUES AND IDEAS OF OUR MATERIALS. TESTIMONIALS ON THIS WEBSITE ARE NOT TO BE INTERPRETED AS A PROMISE OR GUARANTEE OF EARNINGS. EARNING POTENTIAL IS DEPENDENT ON THE PERSON USING OUR TRAINING, IDEAS AND TECHNIQUES.

ALL TESTIMONIALS ON THIS WEBSITE ARE REAL. HOWEVER, YOUR LEVEL OF SUCCESS IN ATTAINING ANY RESULTS DEPENDS ON THE TIME YOU DEVOTE TO THE PROGRAM, YOUR SKILL LEVEL, YOUR FINANCES, AND OTHER FACTORS OUTSIDE OF OUR CONTROL. SINCE THESE FACTORS DIFFER ACCORDING TO INDIVIDUALS, WE CANNOT GUARANTEE YOUR SUCCESS OR INCOME LEVEL. NOR ARE WE RESPONSIBLE FOR ANY OF YOUR ACTIONS.

 

Questions? Email our Super Hero Support Team and Darius

at:  wealthtraininghelp@gmail.com