Some co-ownership groups form as LLC, are they difficult to create and manage?
There are many advantages to forming an LLC to co-own a vacation home — the limited liability protects owners’ other assets; transferring shares of the LLC do not need a deed change; and the operating agreement of the LLC can ensure that each owner has a full understanding of how issues and questions will be addressed. However, some owners worry about the complexities of an LLC. With some knowledge, an LLC can be simple, straightforward and easy to create and maintain.
Many online services help groups form an LLC — all you need to start is the state in which you want to incorporate (usually the location of the vacation home) and a unique name. You will need a registered agent to receive and file documents in the state of incorporation. If needed, these are available online for a small fee for non-residents.
The LLC operating agreement can be the ownership agreement that is the central repository for all of the information about how the co-owners operate and make decisions. Rigorously developing this agreement can make the rest of the co-ownership sail smoothly.
Properly maintaining an LLC can be easily accomplished with the help of software services ensuring that necessary paperwork is filed. They can help ensure that the personal business of the owners is separated from the business of the LLC, including that the assets of the LLC are properly insured, protecting the owners from liability and loss. You can hold annual meetings online, easing the process for owners with various locations.
Using an LLC to own a vacation home helps to alleviate the worries that keep many people from considering co-ownership. Your personal assets are protected, it is easier to sell your share, and the complicated issues can be handled with elegant software.