Legal Question in Business Law in Maryland

A business associate and I want to purchase investment property (multi-family residences) together. We are wondering what the best business entity is best to do this under. We both work full time and would be contributing equally towards purchases.

Asked on 2/26/14, 3:38 pm

2 Answers from Attorneys

Dipo Akin-Deko Akin-Deko Professional Services Firm PLLC

There are many options and it all depends on how you want to structure responsibilities and liability. To give you the best idea an attorney would need to sit down and go over what you want to see occur. I suggest meeting with a business law attorney to go over the options and make sure a proper operating agreement, incorporation document and/or partnership agreement is drafted. Our firm handles such things so feel free to contact us via email or telephone.

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Answered on 2/26/14, 3:54 pm
Cedulie Laumann Arden Law Firm, LLC

Your question really involves three subsets: 1) what is the best type of structure (LLC, corporation) to register with the state 2) what is the best type of tax set-up (bypass, subchapter S, corporate) and 3) what is the best internal structure to allocate responsibility, decision making and finances between two owners (which depends in part on what structure you select and in part on how you draw up the governing documents). As the other attorney post noted, formation decisions are best made after careful consideration of a number of different factors.

Unfortunately some types of real estate investment entities (REITs) are not available to small enterprises. You're encouraged to seek legal counsel and I wish you success!

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Answered on 2/27/14, 7:19 am

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