In the case of any property investment which occurs to be encumbered with debt, the debtor’s name will look on the recorded deed of trust, even when name is taken in the name of a trust or an LLC. However, if the investor personally guarantees the loan by acting AS the borrower via the trust thing, THEN the borrower’s name could be kept confidential! At this point the Trust thing becomes the borrower South Florida Real Estate and the owner of this house. This insures the buyer’s title doesn’t appear on any recorded documents.
Because formalities, for example holding annual meetings of shareholders and keeping annual minutes, aren’t required in the event of limited partnerships and LLCs, they are usually preferred over corporations. Struggling to observe corporate formalities can lead to failure of this liability shield between the individual investor as well as the corporation. This failure in legal terms is known as”piercing the corporate veil”.
Limited partnerships and LLCs can create a more successful asset protection stronghold than corporations, since assets and interests might be more difficult to achieve by lenders to the buyer.
To exemplify this, let us assume a person in a company owns, say, an apartment complex and this corporation receives a judgment against it by a creditor. The creditor can now induce the borrower to turn over the inventory of the company which can lead to a catastrophic loss of corporate assets.
However, once the debtor owns the apartment building through either a Limited Partnership or an LLC the creditor’s recourse is limited to a simple charging arrangement, which places a lien on distributions from the LLC or limited partnership, but retains the creditor from seizing venture assets and keeps out the creditor the affairs of the LLC or Partnership