The Nevada Limited Liability Company (rather than a corporation) is the primary entity used for asset protection. Unlike in many other states, A Nevada LLC does not require a business purpose to be formed. Currently, 14 states (California, Indiana, Iowa, Louisiana, Maryland, Michigan, Minnesota, New York, North Dakota, Oregon, Pennsylvania, Rhode Island, Texas, and Virginia) require a business purpose in order to form an LLC. Because of this, an LLC formed in these states cannot be used to hold an asset to protect it from creditors, unless that is deemed a business purpose in that state.
A Nevada LLC can be operated as "an investment holding company" or "an investment management company" and simply "hold and manage" assets. In this way "personal assets" can be protected from judgments.
Cash, investment securities, notes, receivables, investment real estate, a personal residence, patents, trademarks, copyrights and shares in a closely held corporation are all eligible. In exchange for transferring assets to the Nevada LLC, you receive an LLC membership interest.
A Nevada LLC used in this way is a very powerful asset protection tool. Many wealthy persons spend tens of thousands of dollars developing complex strategies to protect assets. For the average person with moderate assets this strategy is affordable and extremely effective!
It is important to understand that the "Nevada Investment Holding LLC" that holds these assets should not be used for any other kind of business or consulting. It should not sign any contracts or do anything that may result in liability. If the Nevada LLC itself is sued all of it’s assets would be put at risk. "High risk" assets and "safe" assets should be separated and not held within the same LLC.
Ready to incorporate a Nevada Investment Holding LLC? This can be done with either of the below packages:
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