Picture
I am often asked whether a landlord should form a limited liability company (or LLC for short) or otherwise incorporate. The short answer is usually yes.

The default for a landlord is a sole proprietorship, where the landlord uses his or her bank accounts for the business and reports business income and loss on schedule C of his or her federal tax return. A judgment creditor can reach the landlord's personal assets, including the landlord's house, to satisfy a judgment. However, it is important to note that there are several exceptions, but that a detailed discussion of the law regarding the creditor – debtor relationship is beyond the scope of this blog post.

By contrast, a landlord who forms a limited liability company is shielded from personal liability for the acts of the corporation, unless the corporation is the landlord's "alter ego." Business income and loss is still reported on schedule C of the landlord's federal tax return, just as if the landlord were operating a sole proprietorship. If there is more than one person involved, those persons can be made members of the limited liability company.

To prove the existence of an "alter ego," a person who sues the landlord would have to prove that the corporation was merely the "alter ego"– and indistinguishable from – the individual landlord.  However, a plaintiff may be able to prove the existence of an "alter ego" if the landlord and the corporation share bank accounts, do not maintain corporate records, and otherwise do not take any steps to separate the finances of the corporation from the finances of the landlord. For this reason, I recommend that any landlord who forms a limited liability company take steps to separate the corporation from their personal life.

The chief benefit of forming a limited liability company is the protection from personal liability.  In other words, a judgment creditor cannot reach the assets of the individual owner, unless the judgment creditor proves the existence of an "alter ego."

However, owning a limited liability company comes with certain responsibilities. The landlord has to file an annual renewal every year with the secretary of state. Moreover, any major decisions, such as the purchase of a new building, furnace, or other equipment, need to be recorded in writing.  In addition, the landlord has to pay a fee to incorporate as a limited liability company.

A landlord who has incorporated as a limited liability company cannot represent himself or herself in District Court, even in an eviction. Rather, the landlord must be represented by an attorney. It is important to note that an officer of the landlord may represent a landlord in conciliation court, but a corporate landlord must be represented by an attorney in District Court.

Given the advantages associated with forming a limited liability company, it is difficult to imagine a scenario where a landlord would not form a limited liability company. However, there are other corporate entities available to a landlord who wishes to incorporate, such as an S Corp. Still, I tend to think that a limited liability company is most appropriate for most people, unless there is a good reason for not forming a limited liability company.

Your needs and whether a limited liability company is right for you depends on your specific situation. You should seek the advice of an attorney before taking action based on this blog post.  To that end, I invite landlords to give me a call at 763-450-9494 to discuss their unique situation. I do not typically represent individual tenants, although I will represent corporate tenants on a case-by-case basis.

WARNING: The information contained in this blog post does not constitute legal advice and may not be applicable to your situation.  Tim is licensed to practice law only in Minnesota, and the information contained in this blog post may not apply to jurisdictions outside of Minnesota.  Further, reading this blog post does not create an attorney-client relationship between you and Baland Law Office, P.L.L.C.  You should always discuss your situation with an attorney before taking any action based on what you may read in this blog.  To that end, please call (763) 450-9494 to set up an appointment to discuss your situation.






 
 
Picture
I'm often asked if a person needs an attorney to represent them in a law-related matter.  As a general rule, you should consider hiring an attorney if you care about the outcome of your case.

The longer answer is that it depends on what you are dealing with and the complexity involved.  If you are dealing with a relatively straightforward matter that is uncontested where the parties agree on what should happen, you might be okay representing yourself, but you should understand the consequences of your actions before you make the decision to go it alone.  If you decide to represent yourself, you will also be expected to know the applicable rules of court and held to the same standards as an attorney.

There are few matters that you should handle on your own, without the advice and guidance provided by an attorney.  In criminal matters, you should hire an attorney if you are charged with a misdemeanor, gross misdemeanor, or probation violation where the potential punishment includes time in jail or prison.  In civil matters, you should hire an attorney to represent you in contested matters, where both sides disagree about the outcome, and especially if the other party or parties in your case have an attorney.  In short, you should consider hiring an attorney when there is a lot on the line.

I'll be the first to admit that I am biased here because I am an attorney and would like to have your business, if I am able to accept your case.  Having an attorney on your side does not mean that you will automatically win, or that the attorney will see all of the complexities, nuances, and issues in your case.  However, in my experience, most people who represent themselves will almost inevitably lose.

You will always benefit from having an attorney represent you, because the attorney will not only see and understand the issues involved but also be able to advise you about options available to you and the potential consequences of each option.  Hiring an attorney may cost more than you would like in the short term, but the long-term cost of not taking action now can be much greater.

Baland Law Office, P.L.L.C. represents clients in both civil and criminal matters, and will meet with you to discuss your case and available options.  The fee for such a meeting is $150, and most meetings last 30 - 45 minutes.  Please call (763) 450-9494 to schedule an appointment to discuss your situation today!

WARNING: The information contained in this blog post does not constitute legal advice and may not be applicable to your situation.  Tim is licensed to practice law only in Minnesota, and the information contained in this blog post may not apply to jurisdictions outside of Minnesota.  Further, reading this blog post does not create an attorney-client relationship between you and Baland Law Office, P.L.L.C.  You should always discuss your situation with an attorney before taking any action based on what you may read in this blog.  To that end, please call (763) 450-9494 to set up an appointment to discuss your situation.

 
 
Picture
If you are served with a Summons and Complaint in a civil case, you should contact an attorney as soon as possible because you only have a very limited period of time to respond.  More specifically, you have twenty (20) days under the Minnesota Rules of Civil Procedure to file and serve your Answer.  Further, your Answer must comport with the Minnesota Rules of Civil Procedure.  Regardless, if you do not Answer within the time specified, a Default Judgment may be entered against you.

A few definitions are in order.  A Summons tells you that you have to do something, such as file an Answer or appear in Court, within a specified period of time or on a specific date, while a Complaint generally sets forth the opposing party’s claim against you.   An Answeris your response to the allegations made in a Complaint.     A Default Judgment means that you did not appear by filing an Answer in response to a Complaint.  If a Default Judgment is entered against you, the Judgment-Creditor can garnish your wages and bank accounts.

The information in this blog post is intended to apply to civil cases only, and may not be applicable to criminal, family, or other non-civil cases.  However, the point remains the same: if you are served with a summons and complaint, charged with a crime, or receive a family-law petition or motion, you need to contact an attorney as soon as possible.  Generally, whatever your situation, it is much easier and less costly to take action now than later to try to undo damages caused if you simply ignore the problem.

Baland Law Office, P.L.L.C. represents both plaintiffs and defendants in civil actions,  We also represent criminal defendants.  Please call (763) 450-9494 to schedule an appointment to discuss your situation today!

WARNING: The information contained in this blog post does not constitute legal advice and may not be applicable to your situation.  Reading this blog post does not create an attorney-client relationship between you and Baland Law Office, P.L.L.C.  You should always discuss your situation with an attorney before taking any action based on what you may read in this blog.  To that end, please call (763) 323 6911 to set up an appointment to discuss your situation.