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Attorney2020
Attorney2020, Attorney
Category: Business Law
Satisfied Customers: 2578
Experience:  I am a practicing attorney. I have experience in business law, bankruptcy, real estate law and estates.
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I am wanting to know the best strategy to protect me

Customer Question

Hello,
I am wanting to know the best strategy to protect me personally and shield business assets.
I live in Oklahoma and operate a successful web hosting business. If you've ever heard of Rackspace or Godaddy we pretty much do the same thing. It operates as an Oklahoma LLC with S-corp election.
I am acquiring another web hosting company which is also an LLC in Wyoming.
I considered dissolving the LLC in wyoming and operating it just as a DBA under my LLC in Oklahoma. I've read that it might be better to form a holding company that I personally own and then the holding company owns each LLC. which would provide some asset protection from lawsuits, creditors etc.
I'm seeking some solid advice as we plan on acquiring additional companies down the road and want to setup the best structure now to handle the expansion.
Submitted: 1 month ago.
Category: Business Law
Expert:  Attorney2020 replied 1 month ago.

I believe you are on the right track. The holding company will maintain all of the profits and assets. The operating companies will generate the profits to distribute to the holding company. If the operating companies are sued, the holding company will create a degree of separation allowing for asset protection and limiting your liability exposure.

I hope that helped. Please ask any follow-up questions. Please rate my answer so that I may be credited for my time. I thank you in advance for your cooperation.

Customer: replied 1 month ago.
What about placing the business in a trust?This essentially protects the assets as well plus has the benefit of a succession plan, right?http://www.llcwizard.com/putting-company-trust
Expert:  Attorney2020 replied 1 month ago.

The shares of the business can be placed in a trust but I would not recommend placing the entire business in a trust as that would not be a legally protected entity offering asset protection. Instead of placing the shares of a business in the name of an individual, oftentimes the shares are placed in a trust for succession planning which I would recommend.

I hope that helped. Please ask any follow-up questions. Please rate my answer so that I may be credited for my time. I thank you in advance for your cooperation.

Expert:  Attorney2020 replied 1 month ago.

I hope that helped. Please ask any follow-up questions. Please rate my answer so that I may be credited for my time. I thank you in advance for your cooperation.

Customer: replied 1 month ago.
how does it work can you elaborate?1)
I would go to legalzoom or something similar and form an LLC in my personal name as the sole manager?2)
I would then transfer the stock from my existing LLC's and the holding company LLC would be the owner of the stock? Do I then also remove my personal name as the sole manager of the operating LLC's and make the sole manager the name of the holding company LLC?3)
The operating LLC's continue to operate individually with separate books, bank accounts etc. But for tax purposes it's all rolled up and reported under the holding company financials?
Customer: replied 1 month ago.
would there be any benefit to using s SHELF corporation a few years old for the holding company?
Customer: replied 1 month ago.
any remarks on my follow up?
Expert:  Attorney2020 replied 1 month ago.

You need to retain an asset protection attorney for this complicated structure. I will not recommend going to legalzoom as this is not a do-it-yourself project. You have essential asked 5 additional complicated questions. The answers above are satisfactory that provide you with the benefits of separating the companies. Now it is time to discuss with a local estate planning/asset protection attorney.

I hope that helped. Please ask any follow-up questions. Please rate my answer so that I may be credited for my time. I thank you in advance for your cooperation.