Can You Form a LLC With Your Multi-family Property?

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Starting a business is an exciting undertaking. There are many things to consider when creating a new business, including choosing the best structure for your business. A popular business structure is the limited liability company, or LLC. An LLC protects the owner from the company's liabilities in the same way a traditional corporation does, but with the added benefit of taxation as a partnership.

Legal Authority

Like traditional corporations, LLCs are created under state statutes. These statutes permit LLCs to transact business in their own name, separate from that of their owner. An LLC may lease or own property, enter contracts, employ staff and more.

Read More: Who Has the Authority to Bind an LLC to a Contract?

Property Laws

Under the state statutes that govern LLCs, these entities are permitted to own property just as an individual would. An LLC can own a single property or multiple properties. Accordingly, the LLC will be responsible for the maintenance of any properties it owns, as well as payment of the properties' taxes and fees.

Liability Protection

Utilizing an LLC to own apartment buildings and other rental properties is a popular strategy among landlords. If a property is owned by an LLC rather than an individual, the individual owner, or members of the LLC, are protected from liability created by the properties. For example, if a tenant sues after an injury on the property, her potential award is limited to the assets of the LLC; the personal assets of the individual owner are protected. Because of this benefit, it may be a wise practice for the owner of multiple properties to create a separate LLC for each property.


To set up an LLC, the property owner needs to file articles of organization with the business registrar of their state. Many real estate investors name the LLC after the property address to which it corresponds. After the LLC is properly registered with the state, the building is sold or transferred by the individual owner to the LLC. Title to the property is placed in the name of the LLC and recorded with the local recorder of deeds.

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