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Expanded Liability Protection - Menn at Work - Vol. 6 Issue 10

Child Support Laws - Menn at Work - Vol. 6 Issue 9

Succession Planning - Menn at Work - Vol 6 Issue 8

Parties and Alcohol, Oh My! - Menn At Work Vol. 6 Issue 7

Wisconsin's New Trust Code - Menn at Work Vol 6 Issue 6

Keeping Up With Federal Disability Law - Menn at Work - Vol 6 Issue 5

Outlining Your Intent - Menn at Work Vol. 6 Issue 4

Divorce vs Legal Separation - Menn at Work Vol. 6 Issue 3

Recreational Immunity - Menn at Work Vol. 6 Issue 2

Employer Sponsored Group Health Plans- Menn at Work Vol. 6 Issue 1

Medical Assistance - Menn at Work Vol. 5 Issue 12

Terminating an Injured Employee - Menn at Work Vol. 5 Issue 11

Post Divorce Checklist - Menn at Work Vol.5 Issue 10

Managed Forest Law - Menn at Work Vol. 5 Issue 9

Collections - Menn at Work - Vol 5 Issue 8

Landlord-Tenant Law - Menn at Work Vol. 5 Issue 7

Estate Planning - Menn at Work Vol. 5 Issue 6

Restrictive Covenants - Menn at Work Vol. 5 Issue 5

Health Care Reform: Changes for 2013 Menn at Work - Vol. 5 Issue 4

Marital Property Agreements Menn at Work - Vol. 5 Issue 3

Employers Beware - Menn at Work - Vol. 5 Issue 2

Tax Audits - Menn at Work - Vol. 5 Issue 1

Wisconsin Paternity Actions - Menn at Work - Vol. 4 Issue 11

Post-Election Estate Planning - Special Report

Easements - Menn at Work - Vol. 4 Issue 10

New Concussion Law in Wisconsin - Menn at Work - Vol. 4 Issue 9

Parental Power of Attorney - Menn at Work - Vol. 4 Issue 8

Remodeling a Home? Menn at Work - Vol. 4 Issue 7

Landlord Tenant Law - Menn at Work - Vol. 4 Issue 6

The New BIGGER Small Claims - Menn at Work - Vol. 4 Issue 5

Proprety Taxes To High? - Menn at Work - Vol. 4 Issue 4

Physical Placement of Children - Menn at Work - Vol. 4 Issue 3

Cell Phone Use Behind The Wheel - Menn at Work - Vol. 4 Issue 2

Estate Planning 101 - Menn at Work - Vol.4 Issue 1

Toy Story - Menn at Work - Vol. 3 Issue 11

Child Custody - Menn at Work - Vol. 3 Issue 10

Conceal Carry Law, an Overview - Menn at Work - Vol. 3 Issue 9

Not Just for Twenty Somethings - Menn at Work - Vol. 3 Issue 8

Now You see It - Menn at Work - Vol. 3 Issue 7

Jack & Pat Fell In A Trap - Menn at Work - Vol. 3 Issue 6

Punitive Damages - Menn at Work - Vol. 3 Issue 5

Tax Man Cometh - Menn at Work - Vol. 3 Issue 4

Recent Developements in Wisconsin Medical Support Laws - Menn at Work - Vol. 3 Issue 3

Mediation: another Option - Menn at Work - Vol. 3 Issue 2

Health Care Reform Changes - Menn at Work - Vol. 3 Issue 1

How Will My Property Be Divided - Menn at Work - Vol. 2 Issue 11

You Can't Take My Secrets! - Menn at Work - Vol. 2 Issue 10

Charitable Giving - Special Report

Financial Power of Attorney - Menn at Work - Vol. 2 Issue 9

The Employee at Will Doctrine - Menn at Work - Vol. 2 Issue 8

Social Media Challenges - Menn At Work - Vol. 2 Issue 7

The Mechanics of Maintenance - Menn At Work - Vol. 2 Issue 6

Construction Liens: An Effective Tool- Menn At Work - Vol. 2 Issue 5

Employee or Independent Contractor - Menn at Work-Vol.2 Issue 4

Payroll Tax and Personal Liability- Menn at Work - Vol 2 Issue 3

Attorney Fees - Menn at Work - Vol. 2 Issue 2

Domestic Partnership - Menn at Work - Vol. 2 Issue 1

Child Support - Menn at Work - Vol. 1 Issue 5

When To Start Your Lawsuit - Menn At Work - Vol. 1 Issue 4

Identity Theft - Menn At Work - Vol. 1 Issue 3

Business Startups/Divorce Terminology/Litigation Basics - Menn At Work Vol. 1 Issue 1




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Business Law

USING MULTIPLE ENTITIES FOR EXPANDED LIABILITY PROTECTION

             Corporations and limited liability companies (LLCs) provide their owners liability protection.  An owner is generally not personally liable for the debts, obligations or other liabilities of these entities.  Thus, virtually all businesses are legally formed as corporations or LLCs.

             Suppose your business is a corporation, and it has been renting its facility for years.  It now has the opportunity to purchase the facility.  You know you want personal liability protection from any injuries which may occur at the facility, so you know you do not want to personally purchase it.  Should you have the corporation buy it?

             A better idea is to form a new LLC to purchase the facility, which would rent the facility to the corporation.  Why is this a better idea? 

             Presumably your successful business (the corporation) has value.  You would like to protect that value from liabilities which could fall upon the owner of the facility.  For instance, if someone gets injured because of a failure to maintain the parking lot that injured party may sue the parking lot’s owner.  While liability insurance is the first protection for the parking lot owner, there could be scenarios where the injury is serious enough that your insurance limits are exceeded.  If the owner of the parking lot is a separate LLC, and the injured party can successfully sue the owner of the parking lot, then that new LLC is at risk.  However, you would not only have personal liability protection for yourself, but you would also have liability protection for your corporation (presuming your corporation was not responsible for maintaining the parking lot).

             Or, let us suppose you have two children attending the same college.  You decide to purchase an off-campus house near the college where your children and some of their friends can live.  Hopefully you will create an LLC to purchase that house, and give you liability protection from the endless possibility of injuries which can occur when your son decides to host a party.

             Suppose you find that being an owner of a rental house to college students is financially successful.  You decide to buy two more houses near the campus to use for off-campus rental housing.  Should you have that LLC purchase those two houses as well? 

             A better idea would be to establish separate LLCs for each rental house.  Why?  Let’s suppose an injury occurs at house #3, and the owner of house #3 becomes liable.  If you just have one LLC owning all three houses, that LLC will incur the liability.  All three rental houses (owned by the same LLC) are essentially at risk to pay the liability for the injury at house #3.

             On the other hand, if house #3 is owned by LLC #3, then only LLC #3 is at risk.  The separate LLCs which own houses #1 and #2 will not have any liability for an injury which occurs at house #3.  Thus, you will have preserved the equity in houses #1 and #2.

             Menn Law Firm regularly advises clients on liability protection.  For further information on this topic please contact Attorney Doug Hahn at douglas-hahn@mennlaw.com or at 920-731-6631.   All of Menn’s attorneys may reached at 920-731-6631. %%webversion%%

Next Issue:

Non-compete Agreements

Get informed on this topic by reading  next month's article titled     "The Challenging World of Non-Compete Agreements"

Habitat for Humanity

Menn Law is proud to be a sponsor of the Hard Hat and Heels charity event on November 14 at the Lambeau Field Atrium.  This event  benefits the Greater Fox Cities Area Habitat for Humanity.  Guest of honor will be Donald Driver.

Upcoming Community Events

Menn Law is proud to support many non-profit organizations in our community.

Volunteer Center of East Central WI Make A Difference Day   Oct. 25

Boys and Girls Club - Hope & Healing: 10th Anniversary Celebration of the Center for Grieving Children  Oct. 30

Menn Law Firm, Ltd., 2501 E. Enterprise Drive, P.O. Box 785, Appleton, WI 54912-0785
920-731-6631