Hi Lee Phillips here
I want to talk to you about what I'm gonna call the disadvantages of an LLC
however what we're really talking about is a
the disadvantage in this case
of an LLC or a corporation or a partnership or anything else
and here's the catch
you are entitled to do any legal work you want for yourself
you can do your own trusts and wills
and the Accumulation and Preservation of Wealth Set
teaches you perfectly how to do that
in fact I'm sure that you can do it better than
90% of the lawyers out on the street
for yourself
but you can't do it for somebody else
you cannot represent somebody else doing their legal work
lawyers have a union
we don't call it a union we call it a bar
the bar is the lawyers' union
and it says that you cannot represent somebody else in legal work
you have to have the lawyer
we love that
but what happens when you
take your rental property and you put it into an LLC
and you have to evict the tenant?
Well you got to go to court, maybe?
The problem is you can't represent the LLC in court
that means you have to hire a liar
I mean a lawyer
well liar that's Texan for attorney, Ya'll go down see your liar
at any rate you've got to hire the dude
and he has to represent you in court
because if you show up in court
on behalf of the owner of the rental unit
the LLC
you can't do that
the court won't let you
so that's a definite disadvantage
now you can maybe
depending on the state
go to small claims court
and as the manager of the LLC you could possibly represent the LLC in small claims court
so that's a possibility
but one of the disadvantages is
you have to be represented by counsel
or your LLC rather has to be represented by counsel
whenever the LLC has a problem
it comes back to the basic LLC stuff that we go through
in the LLC Wizard all the time
it's the formalities
you have to understand
that this LLC isn't you
and if you treat it like you
you lose all of the corporate shield and everything else
that's what we go through in such detail
in the LLC Wizard
but one of the things that you can't do
and it is key here
is this isn't you
therefore the judge
the courts
the legal system is going to say hey
this isn't you
you can't represent this other guy
only a lawyer can represent another guy
and so you're back to square one with the liar
and a lawyer involved and you have to hire him
that's a disadvantage
of holding property in an LLC.
Now I'm gonna think maybe that the disadvantage there
is outweighed by all of the advantages
the asset protection, the tax possibilities, everything else
so most people represent or concentrate
on the advantages
and I'm gonna say that the advantages
far outweigh the disadvantages.
So Lee Phillips talking about a disadvantage
of an LLC or a
corporation or a partnership or any other legal entity
that's not you.