West Virginia S Corp
Creating a Rental Property LLC in West Virginia
Embedding your West Virginia rental property in an LLC carves out a coal mine of legal protection and financial benefits, powering your investment through the rugged terrain of the Mountain State’s real estate market.
Starts at $0 + West Virginia state fees and only takes 5-10 minutes
Whether you have a vacation rental, residential home, or apartment building, you might not think of yourself as a business when you’re considering renting a property out to someone else. But the truth is you’ll be entering into contracts, collecting revenue, and managing expenses. Your tenants can sue you if things go wrong, just like any business. It’s a good idea to take advantage of legal protections for yourself, like forming a limited liability company (LLC).
The benefits of forming an LLC are immense for real estate investors for a fairly low cost. When you use our services to form your West Virginia LLC, we can make the process quick and easy. And after formation, our other products and services can help make running your rental property business as smooth as possible.
Benefits of creating a rental property LLC in West Virginia
Liability Protection
When you personally own your rental properties and someone sues you, they will be suing you personally and individually. This means that, theoretically, they can go after your personal assets, such as your home, vacation property, cash, and investments. But if an LLC is the official owner of your rental properties, the only assets that can be taken in a lawsuit would be those that are owned by the LLC.
Pass-Through Taxation
Pass-through taxation is a way to pass business income through the corporation or LLC or some other business entity. The income passes to the owner of the LLC and is taxed at the individual tax rate. Without a rental property LLC in West Virginia, you could possibly be taxed twice on the rental income you receive — once at the business level and once on your individual taxes.
Separation of business and personal property
As mentioned above, there are benefits to having your business assets separate from your personal assets. When your assets are owned in one basket, then this opens you up to all sorts of negative possibilities. Lawsuits could potentially take everything from you. Also, if you had to declare personal bankruptcy for whatever reason, all your personal assets, including your rental properties, might be subject to bankruptcy.
Series LLCs for real estate investors in West Virginia
A series LLC is a special kind of limited liability company that allows the owners to establish different “series” under the LLC umbrella. A West Virginia series LLC is a vehicle that allows you to compartmentalize assets that are owned by the umbrella LLC. A series LLC is a good option for real estate investors with multiple properties or those who intend to acquire more than one rental property. Each series can own one individual rental property. This protects all your other properties from lawsuits solely related to that individual property.
What to know before creating a rental property LLC in West Virginia
Creating a rental property LLC in West Virginia can help you take full advantage of what the law allows. When your rental properties are owned by an LLC that you control, it provides both financial and legal benefits. These benefits don’t exist without a rental property LLC in West Virginia.
How to form an LLC for your West Virginia rental property
Here is a simplified version of the steps to create a West Virginia LLC:
Step 1: Choose LLC Name
When selecting a name for your LLC, be sure to choose one that meets state requirements. We can do a search for you to see if the business name you want is available. If it is, let us reserve the name while you get the filing paperwork together.
Step 2: Select Registered Agent
Businesses in the state are required to appoint a registered agent. This person is responsible for receiving important documents on behalf of the LLC, such as state correspondence and legal notices. If you need a registered agent, we can help you find one.
Step 3: File Articles of Organization
To officially form your rental property LLC, you need to file Articles of Organization with the right state office and include the appropriate filing fee.
Step 4: Create an Operating Agreement
Your LLC’s Operating Agreement is one of your most important business documents. It governs how your LLC runs and provides instructions for anything from voting procedures to dissolve the company. If you’re not sure how to create an Operating Agreement, we offer templates that can serve as a guide.
Step 5: Apply for Employment Identification Number (EIN)
The IRS assigns businesses a nine-digit EIN that is used to identify their enterprise. Having one is necessary for certain business matters, such as opening a business bank account, hiring employees, and getting financing. You can apply for an EIN yourself on the IRS’s website, or we can do it for you with our EIN service.
Additional Steps
To transfer real estate you already own to your LLC, you normally need to sign a deed granting the property to the LLC and pay any relevant taxes and file it with the county clerk. If you have a mortgage on the real estate, you will need to notify your lender about the new owner so it can update the mortgage and change the terms and rates as necessary. You also need to change the language in your leases and inform your existing tenants about the new ownership.
Who should form a West Virginia LLC for their rental property?
You may want to seriously consider establishing a rental property LLC in West Virginia if you’re a first-time purchaser of rental property or even if you currently own multiple rental properties in the state. If you already own property in your own name, it just takes a few extra steps to legally transfer the ownership rights to the LLC. But the easiest way is to create the LLC first, then purchase your new rental properties through the LLC.
How we can help
We’re here to help you with every aspect of your rental property LLC in West Virginia. The products and services we offer to our clients can help you keep an organized and successful rental business.
West Virginia LLC for Rental Property FAQs
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The first and most important benefit is protecting yourself from potential liabilities. When you rent a property, there are a lot of things that can go wrong. If you’re a landlord with several rental properties, protecting yourself from the financial consequences becomes even more important.
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You can name your LLC anything you want as long as it complies with West Virginia law. Your name must include the phrase “limited liability company,” “limited company,” or an abbreviation like LLC, LC, or Ltd. You also have to make sure the name you choose isn’t already in use.
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No. If your company is properly organized and formed as a West Virginia LLC, it only needs to be registered with the Secretary of State in West Virginia. However, if your LLC operates in other states, then you must register the company in all states where you conduct business.
Disclaimer: The content on this page is for information purposes only and does not constitute legal, tax, or accounting advice. If you have specific questions about any of these topics, seek the counsel of a licensed professional.
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