Juanita, who lives in Florida, asks the following question about holding companies:

Q: In which state is it best to open a LLC Holding company? We live in Florida.

A: Definitely NOT Florida. Florida recently had a case where an LLC (limited liability company) with a single member was allowed by the court to be dissolved to satisfy a claim against the member of the LLC. Instead, form your LLC in a strong LLC state, such as Wyoming or Nevada, where the only remedy is the charging order. Then, you will have to qualify your subsidiaries to do business in whichever state you are doing business. According to my friend, Garrett Sutton, an attorney in Wyoming and Nevada, this should give you much better protection than simply forming in Florida.

For more on asset protection, join us at our Rich Dad Education Tax and Asset Protection class held each month. This month, we are holding two, one in Salt Lake City (this week) and one in Seattle at the end of the month. For more info, contact us at 866.467.5809.

Warmest regards,

Tom