Business Structure Question

[blessed09]

I am starting a business and have a question on the organization type. Usually an LLC covers it and not for sure if it will this time. An LLC can have an operating agreement for multiple partners. This setup could have multiple operating agreements if that would work.

My example is building houses A, B, C, and so on. You have business partners/investors 1, 2, 3, and so on. I want a single entity name across all houses avoid creating a business entity for each house. Potential scenario:

House A - Partners 1, 2, & 3

House B - Partners 1, 2, & 4

House C - Partners 1, 3, & 4

House D - Partners 1, 2, & 5

House E - Partners 1 & 3

On the accounting side I can keep track of the expenses and income for each House. I could then proportion that gain/loss across the partners/investors of that House. Would federal laws or rules let me do that?

 

[frunziss]

@blessed09 Creating entities for each property can be a pain and will obviously result in some added costs. I still think it far outweighs the headaches of trying to have a single entity and managing all the complexities that come with certain partners having a stake in specific assets of the business.

 

[blessed09]

@frunziss I agree it would be easier than individual LLC's. I plan to consult a lawyer and will see what they advise.

I think an operating agreement could be created for each house. As each one is closed out, you could then terminate the operating agreement for that house/property and distribute the remaining equity. I watched our high school secretary track all class and club account balances in a single spiral bound notebook.

I think the officers could get confusing...maybe not if you keep addressing it in the operating agreements. OA-A, OA-B, and so on...