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Richard - Bizlaw
Richard - Bizlaw, Attorney
Category: Business Law
Satisfied Customers: 10648
Experience:  30 years of corporate, litigation and international law
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What is the best legal entity for a personal portfolio management

Customer Question

What is the best legal entity for a personal portfolio management company, and what is the best state to incorporate in for said company.
Submitted: 7 years ago.
Category: Business Law
Expert:  Richard - Bizlaw replied 7 years ago.
What do you mean by a personal portfolio company? Is it your own investment portfolio or are you talking about managing other people's investments?
Customer: replied 7 years ago.
I'm talking about a portfolio managed by myself and a partner of our own investments, a personal portfolio.

We're incorporating a business he currently owns and plan on having a few other startups later this year. Our goal is personal asset protection and segregation of assets.

The plan looks like this:

Holding Company ( LLC ) - Nevada
Pool Company ( LLC ) - Florida
Portfolio Company( LLC ) - Florida


Thoughts, comments ?
Expert:  Richard - Bizlaw replied 7 years ago.

The LLC will provide the limited liability you need for asset protection. Just remember, if you personally guarantee obligations you basically waive the benefits of limited liability with respect to that guarantee. Also, if you fail to adequately capitalize the business for the nature of the activities in which you plan to engage, you can also lose the benefits of limited liability through what is called piercing the corporate veil.


Since there are just the two of you, I see no need for a holding company. YOu should hold your respective interests in the entities you form to run the separate businesses directly. A holding adds a layer of cost plus creates the need for consolidated tax filings and accounting which is just an unnecessary expense.


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This communication is not intended as legal advice. A local attorney should always be consulted for legal advice. No client/attorney relationship is intended or created by this communication.