DEVOUGAS LAW GROUP BLOG
COVID-19 has been the ongoing theme of 2020. The global pandemic has radically changed the landscape of work, education, healthcare, and fundamental human interaction. Words like “masks,” “social distancing,” and “quarantine” have become commonplace in our lexicon. Another unintended consequence is that a number of industries have been crippled, with no recovery in sight.
It is common knowledge that it is wise to hold real estate in the name of a business. Why? It shields the owners from personal liability.
Most real estate investors form an LLC to purchase real estate and because LLCs are so prevalent, most lenders are comfortable lending to LLCs. However, there are still risks associated with using LLCs to purchase real estate.
When dealing with small businesses, one of the first things I ask is if it has an operating agreement. Unfortunately, the answer is a coin flip. If there is an operating agreement, my follow-up question is whether the members are aware of what is contained in the operating agreement and does it reflect the current nature of the company. Inevitably, I am met by blank stares. On the other hand, when entrepreneurs come to me to form their LLC, the operating agreement is where they try to “cut corners.” This post is an effort to end these risky behaviors.
The International Monetary Fund recently predicted that because of the “Great Lockdown,” the world would experience the worst economic downturn since the Great Depression. Countries all over the world have been taking drastic measures to “soften the blow” dealt by the COVID-19 crisis.
I vividly remember the last Great Recession. I was a recent law school graduate. The housing market had collapsed and the unemployment rate was nearly ten percent. I began to reflect on the lessons of the last economic downturn and what moves entrepreneurs and business owners can make to survive these trying times.
Below are four practical tips for entrepreneurs to not just survive, but to thrive in the times to come.
The Limited Liability Company is currently one of the most popular forms of business entity. It is easy to create, relatively inexpensive to maintain, and extremely versatile. However, single-member limited liability companies (SMLLC) face more scrutiny than multiple-member limited liability companies (MMLLC).
