Hey everyone, Taylor Mathis here. The key law girl, marketing director, and legal assistant at Kate Law. Today, I'm going to talk to you guys about a topic that we get asked about a lot, and that's about if a parent LLC should own a subsidiary LLC. We're gonna go over all of that, so be sure to keep watching. But before we get into things, throw this video a thumbs up, be sure to comment with any questions that you guys have, and hit that subscribe button right now. We upload new content every week to assist with your legal needs. Music. So, the question stands, should you form a parent LLC to own one or more subsidiary LLC's? Well, honestly, it all depends on your risk tolerance and what you're willing to do. A parent subsidiary entity structure exists when one LLC, also known as the parent LLC, owns one or more other LLC's, the subsidiary LLC's. Most people understand that maximum asset protection requires that you put one real estate property or one business in an LLC that owns no other property or operates no other businesses. Everyone knows what happens if you put all your eggs into one basket and then drop the basket. You end up losing all your eggs. The primary reason to put real estate properties and businesses in separate limited liability companies is so that if a financial problem arises with one property, it doesn't affect the value of other properties or businesses. There are several disadvantages with owning multiple entities. They're obviously expensive to create and operate. The administrative burdens, such as bookkeeping and tax returns, are multiplied. And you need separate bank accounts for each entity. Multiple entities are more work and cost more than a single entity. Some people create parent subsidiary entity structures to...
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Video instructions and help with filling out and completing Who Form 1120 Reit Subsidiaries
