Is it important or necessary for me to have an LLC for a duplex rental business iin order to be protected from liability?

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Is it important or necessary for me to have an LLC for a duplex rental business iin order to be protected from liability?

I am the sole owner.

Asked on March 21, 2013 under Business Law, Texas

Answers:

B.H.F., Member, Texas State Bar / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

You are not required to have an LLC in order to operate a duplex rental business.  However, the risk you take is if you are sued, then your personal assets could be at risk to satisfy a judgment.  If you want to protect your personal assets, then you could convert your sole proprietorship to an LLC and have yourself named as the sole owner/shareholder.  Before your set up an LLC, it really helps to visit with a business law attorney and tax attorney to help you weigh all of the advantages of incorporation.  It will cost you a bit on the front end to set up an LLC, but if you properly plan the LLC it can save you a great deal of financial grief on the back end.


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