For a number of reasons, you may choose to transfer real estate or other property into an LLC. You may decide to change your business structure from a sole proprietorship to an LLC formed by yourself and your spouse, or you may want to transfer a second home or a vacation rental home to your LLC. Whatever your reasons, the transfer of property to your LLC should be relatively painless.
Organize your LLC if it is not already formed. Begin by searching the secretary of state’s website or contact the secretary of state to confirm that the intended name of your LLC is not in use. Each limited liability company must have a separate and distinct name from any other. Complete the articles of organization located on the website or have your attorney prepare your articles of organization. In most states, articles of organization should include the name of a registered agent, who will accept official correspondence for the LLC, as well as the names and contact information for the initial members. File the articles and pay the filing fee through the appropriate office or its website. In most states, filing will be through the secretary of state office.
Read More: Tax Consequences for Transferring Property to a Limited Liability Company
Contact an attorney to prepare a deed to convey the desired real property. If you are the owner of the property, sign the deed transferring the property to your LLC in the presence of a notary public who will acknowledge your signature. File the completed deed in the deed records for the county where the property is located and pay any filing fees due. If the property is currently mortgaged, contact the lender to get approval prior to the transfer as most mortgages have a due-on-sale clause.
Execute and have notarized a bill of sale for any personal property or business assets that are transferring to the LLC. Sign the title to any vehicle or other titled property over to the LLC and complete the transfer by filing any necessary transfer documents with the appropriate county office.
Contact your accountant who may assist you in acquiring a tax ID number and who may advise you on tax issues or consequences resulting from the change in business status. Remember to transfer names on any business licenses or other official documents with appropriate governmental entities.
Seek the advice of both your attorney and accountant prior to forming an LLC for business purposes.
Marie Murdock has been employed in the legal and title insurance industries for over 25 years. Murdock was first published in print in 1979 and has been writing online articles since mid-2010. Her articles have appeared on LegalZoom and various other websites.