Why would you need to put your assets into a Corporation?
Individuals who are in the process of forming a corporation or limited liability company (LLC) can use the help of a business counsel attorney when they’re launching their business. Often, these individuals have already acquired business assets, such as cash, a building, equipment, vehicles, patents, trade names, or other types of assets, which may be held in their personal name.
How can I transfer my assets into an LLC or Corporation?
One of the most common questions business owners have is how to transfer their personal assets into their corporation or LLC. The answer is straightforward: the owner must take action to put the asset into the entity. It is important to remember that a corporation or LLC is a separate legal entity from its owners, and therefore, the owner must enter into one or more agreements with the entity to transfer the assets.
There are two main ways to transfer assets into a corporation or LLC. The first is through an equity transaction, where the business owner contributes the asset to the entity in exchange for equity or ownership interest, such as stock or membership interest.
The second type of transaction is a non-equity transaction, where the business owner sells the asset to the corporation or LLC in exchange for cash or a promise to pay cash.
It is crucial not to neglect or delay the transfer of business assets into the corporation or LLC as it can cause complications and deprive the business owner of the benefits of having a separate legal entity. Additionally, if an individual is considering investing in a corporation, conducting proper due diligence is necessary to determine the assets that the corporation owns. This can save a lot of trouble and money in the long run.
Consulting with an attorney can save you time and money in the future.
If an individual is in the process of forming a corporation or LLC or considering investing in one, it is advisable to consult a business attorney early in the process. Our attorneys can assist with navigating these complex legal issues and ensure that the business is set up for success. If you have any questions regarding forming business entities, getting rid of toxic business partners, or understanding how best to legally set up your business for success, give us a call today.