I am wondering where to set up my LLC. I live in California, but want to buy a MHP in one of the surrounding states (most likely in Nevada). Should I set it up in Nevada? If I do set it up in Nevada, I know I can set up a PO box there, but how do I get my mail?
I’d recommend talking to an attorney and follow their advice. I live in CA and purchased a park out of state (and have owned/sold mobile homes out of state on a triple net lease). CA requires that you have a business set up in CA (an LLC for example - $800 per year) and have a Foreign Entity LLC, which the park will be in, under the CA LLC. My guess is that an attorney would tell you something similar.
You’d need a NV representative to represent you, such as a real estate attorney, accountant, etc. Sometimes they will allow you to use them/their address for free or may charge a few dollars per year.
1 Like
We use Delaware for the Trust which in turn owns LLCs in each state we operate communities in. The laws are a bit different for the finance operation.
I like Delaware because about the only thing they do right is shield corporate privacy from everything but a Federal or Delaware court order. They ignore inquiries from other states, or even court orders from other states.
There are operations in every state where you can use their street address (which is often required) they own and they automatically forward all your mail to wherever you specify. If you need one for Nevada, email me and I will introduce you to one. He also provides the “brick and mortar” for a couple of clients who have finance operations in Nevada but whose real headquarters are located in California.
1 Like
I live in CA but have parks in NE and SD. As tmperrault said it cost $800/ year in CA but in those other states, I think they are costing me $10 - $20/year. The set up was super simple and took about as long as ordering Chinese take out.
1 Like
Oh, yeah, and I use Incorp.com for my registered agent for all my LLCs . I think they charge about $60/year and do a good job of informing me when I need to file something.
If you have out of state parks I can think of NO reason to have a CA LLC. You don’t need an out of state PO box. Your registered agent will receive all notices (which is their propose and why all states require you hire one) and then forward them to you. There is really no reason to hire an attorney to set up an LLC. When you see how simple the process is, you will feel foolish for ever thinking it takes a professional to handle it. You could get all done during tomorrow’s morning coffee.
1 Like
Great!! Thank you all for your advise. Much appreciated.
1 Like
Like Randy_CA said, it’s super easy and can be done on line often. Definitely look into the requirement of having the CA LLC. My accountant informed me that it was necessary. Also, the Secretary of State said the same thing. It’s a ridiculous rule. The way I understand it, even though your business out of state, the SOS says that you have business activity in CA and must have the LLC here as well. I know other mhp owners in the state who don’t have the CA LLC and have not been caught.
1 Like
There are different issues here.
(1) You should always use the state of the real property to hold the title to the real property asset. If the property is in AZ then create an AZ entity.
(2) If you live in California, and you are affiliated with out-of-state companies (manager, owner, etc) then CA wants to tax that because hey, they can. If you want to live in their system then you have to play by their rules. Get a CA attorney to guide you how best to set up this portion of your company. But I still think you should create the property-owning company differently because it’s not in CA but in another state per your question.
(3) For setting up an out-of-state LLC there are a hundred companies out there that will guide you through this process, for a fee that varies according to how much hand holding you need. You need a “registered agent” in a state to receive registered corporate legal mail but typically you have a lawyer involved in your closing anyway so you can have them do it as part of leadup to closing. Or you can have these companies do it for you as they become your “registered agent” and forward all the correspondence going to your “registered agent’s address,” again for a (minimal?) fee. Normally your mail would come to your park manager or your PO box…so the registered agent is really for legal snooping/sleuthing/official business. As long as you deal with the registered agent, you can usually file the LLC creating document on paper or online with (another) minimal fee. The paper filed with the SOS “creates” the LLC but it doesn’t “mean” anything except what the LLC Agreement says it means. Mostly.
(4) You would be crazy NOT to talk to an attorney about your LLC Agreement which governs what is supposed to happen inside the LLC and among the partners of the LLC. This is an “Important Document!” But you don’t need to pay the attorney $200 per hour or more to set up the LLC itself. It depends how cheap you want to be. If you know what you are doing you can do it yourself, but, as with all things, if you don’t know what you are doing you can shoot yourself in the foot.
4 Likes