yet more LLC questions

[ckh]

OK, so I've searched this forum and can't find the answers to a couple of LLC questions:

Do I have to get a federal tax ID number if I'm treating the income as pass-through?  One of the sites I'm looking at to help form the LLC inidcates that this is highly suggested (and wants to charge $99 for doing it).

Do I need to open a bank account for the LLC or can I use my personal checking account.  My understanding is that any loan for property will be guaranteed by me anyway (in my name), so is there benefit to having the LLC having a bank account?

Thanks.  I'm looking forward to doing my first couple of deals.  Looks like one will be a rental opportunity and the other a rehab and flip.

[John Hyre]

1)  If the LLC is a "disregarded entity", no new tax ID number needed.  If it's a partnership with anyone but your spouse, a TIN is definitely required.  Don't pay $99 for one - get one online at www.IRS.gov - or pay me, I'll do it for $50 - easy money for 5 minutes of work!

2)  You need a spearate bank account not for tax purposes but for asset protection.  If you use a personal bank account, you are co-mingling personal & business funds - that's the sort of thing that gets a court to pierce the veil.  EACH entity should have its own bank account to maintain the distinct & separate identity of each.

John Hyre

[ckh]

Thanks for the response - understood.

So, in my case, it wil be just me, so no new tax ID number required.

However, as I'm out of the country, I'd like to somehow empower (power of attorney?) my father to have full right to sign real estate deals on my behalf.  Do I need to make him part of the LLC to do that (if so, in what capacity?).  Also, as some loans require a personal co-signature, would that mean that he would have to have two powers of attorney - one for the LLC and one for me personally?

Thanks, Corey

[ckh]

Also, I think I'd like to set my father up as having signing authority on my LLC bank account that I will establish.  Do I therefore need to make him a manager of the LLC or somehow involved in the LLC?  If not, I'd rather keep him out of it.  

Also, as I mentioned, I'd like to give him a power of attorney - can I do it for both the LLC and for me personally?

Thanks

[John Hyre]

Your questions are more an issue of local law.  Clearly, if he is an officer and a resolution is passed to allow him to do certain things, he can do those things.  A power of attorney is also likely to work if well worded.  He probably has greater personal liability as an officer - thought that's rather on the speculative side on my part.

John Hyre

[aak5454]

you are going to have problems given that you are out of the country.  I use to travel a lot of out of the country frequently and this caused a big hassles on several deals with respect signing loan docs.

Some (many?) lenders will only do special power of atty for a particular deal and you have to use their form and it is only good for a limit time.  Several lenders I have dealt with will not accept blanket power of atty (I have tried).  The state reason was these situations present a high risk for fraud.

With respect to you father and the LLC, you just need to make him a manager of the LLC in the governing docs of the LLC.  This will give him the authority to act on behalf ot he LLCs but is decoupled from how much of the LLCs profits and losses is broken out to him on the K-1 tax document.

[ckh]

Thanks - I'll try making him a manger of the LLC which should allow him to sign on its behalf and also be on the checking account.

With regard to his signing loan documents, etc. - I am going to meet with his mortgage broker and explain our situation.  Hopefully as they know each other we'll be able to use a power of attorney for loans and then I could always go through her...

that's my plan for now...

thanks to all on these boards.  You are incredibly informative and generous with your advice.  

[islander]

I've been reading this post and it was stated that one can go to irs.org to for an LLC what form is it that one needs to fill out?

[islander]

never mind i found it

[sybadon]

never mind i found it

can you post the link

[islander]

http://www.irs.gov/businesses/small/article/0,,id=98263,00.html

when you get here scroll to the bottom of the page for the choices

[islander]

ok that didnt work go to www.irs.gov and click on the information button business, then click on partnerships, then click on starting a business, then click on business structure, from here you can choose any thing s corp corp partner and more...