LLCs protect personal assets from business liability, but only if properly structured and operated. When Yang's real estate deals failed, a plaintiff tried to pierce the corporate veil to reach his personal assets. Without separate records, adequate capitalization, and proper formalities, your LLC won't shield you.
Chapters
Real estate investors use LLCs every day. Whatever happens on that real estate deal or that business, if something goes bad, that we don't get a judgment against us personally. And I think that is, I mean, that's one reason we sell LLCs and why we like them and use them ourselves and use them for tens of thousands of clients is that liability protection that the liabilities of the entity don't attach to you personally. And so, In that case, like Mark said, just want to make sure everybody understands the facts. The loans and the documents, the agreement was between Yang and these LLCs. There was no individual that signed for these notes or agreed to pay it back. It was just these LLCs. Well, the real estate deals didn't go well. The LLCs didn't have any assets worth pursuing. So the plaintiff said, I want to go through these LLCs and get to that individual owner. They have other assets. I want to go after those. And so we want to make sure you don't end up like Knight's Genesis Group. We don't want your other assets to be exposed, so we want to make sure that you're using the LLC properly so you don't end up like this, having your personal assets exposed from a business liability.
