Barry Oliver <barrysuperhawk@comcast.net> wrote:
> Here's another twist. What about "residence"? I am close to trying to
> switch my state of residence to MO from IL. If I buy into a Property
> management outfit, I will have a legal residence to refer to, and that
> is all it takes.
I'm not sure what you mean about buying into a property management
outfit. Do you mean forming a Montana (Missouri?) llc?
Things seem to get more cut and dry when people try to register
vehicles to themselves when they are not physically in the state in
which they are registering them. Most states seem to have laws to the
effect that if you are in the state for X number of days per year, you
must establish residency there, and thus doing something like
registering your vehicles in MT while living in IL would be illegal,
however if you form a MT corporation (LLC) and transfer the vehicle
ownership to the corporation, that corporation can legally register
the vehicles in MT because the corporation is considered a MT
resident. I guess the idea would be similar to parents buying a car
for their son to use while he is away at college. The ownership of
the car and the registration, insurance, etc. is all done in the
parent's name, but the child has the use of the car. The parents and
the child are separate legal entities, just as the LLC and a member of
an LLC (even a sole member) are separate legal entities. Anyhoo, its
the LLC which creates that layer of separation; as the legal owner and
registrant of the vehicle, it only has to conform to the laws of the
state it was formed in, and it is basically letting you use the car,
wherever you happen to be. ...as I understand it anyway.
At any rate, be very careful about changing your own "legal"
residence. If you are in IL more than the statutory minimum days per
year, you might legally be required to remain an IL resident. Owning
property in another state gives you an address there, but does not
necessarily qualify you as a resident of that state. (Something that
is related to this and which seems a bit goofy is that for some
states, the number of days seems to be as low as 30. Where does that
put the snowbirds who might own a condo in the south, or maybe even
several condos in several states? You can only be a resident of one
state at a time, but if you have 4 homes in 4 such states and spend 3
months in each home, each state is going to want you to be a
resident?) Anyway, that's kinda getting off topic, but just seemed a
bit strange to me.
> The twist with the LLC is once they are registered to
> the company, the company buys the insurance. Think of it if you formed
> a vehicle collection llc... the possibilities are endless...
Yep, but apparently, some insurance companies do not like insuring
a vehicle which is not garaged at the same location as the legal
owner. I don't have any firsthand knowledge of that, that's just
something I saw references to in forums and on web sites.
One thing that had crossed my mind was a thought about reducing the
cost for such an endeavor, would be to have more than one person form
the LLC, for example "DML Vehicles, LLC" with Barry, Mike and Jon as
members; instead of $1,000 or so to form the LLC, the cost could be
split $333 each. However, a potential snag there might be that you
need to legally transfer ownership of your vehicles to the LLC, which
means you are transferring ownership of the vehicles to the other
people too. The LLC's operating agreement could probably be drawn up
in such a way as to ensure that the ownership interest of the vehicles
can never "get away from" the "real" owner, but the additional cost to
form a non-standard entity like that would probably negate much of the
savings, and plus, who knows what would happen in the event of a gov't
seizure, bankruptcy or divorce proceedings against one of the members,
etc. I kinda ended the thought by thinking that its probably safer to
just do it individually, or if someone were to do such a thing, maybe
keep it to family members or something.
It does seem like there would be a business opportunity of some
kind there though. Instead of everyone forming their own LLC, why
aren't there "umbrella" LLCs, which form one LLC and then have clients
which transfer ownership of their vehicles to the corporation, with
whatever legal contracts and documents as may be necessary to ensure
that although the LLC legally owns the vehicles, the "true" owner
still retains all rights to the vehicle and can transfer it back at
any time, etc. There would be a large element of trust involved,
however. Consider, for example a bankruptcy proceeding where all
assets of the LLC were frozen, this would include the vehicles, and
who knows what would happen at that point... Again, back to probably
safest for each individual to form their own LLC... :-)
--
-Jon-
.- Jon Steiger -- jon@dakota-truck.net or jon@jonsteiger.com -.
| '96 Kolb Firefly, '96 Suzuki Intruder, Miscellaneous Mopars |
`-------------------------------- http://www.jonsteiger.com --'
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