In this episode, Jason Hartman talks to Garrett Sutton, a returning guest, lawyer, author, and a Rich Dad advisor. Garett gives an update on new asset protection laws that have changed since he was last on the show. They discuss what a B Corp is, how trusts work, and delves into LLCs.
Announcer 0:00
This show is produced by the Hartman media company. For more information and links to all our great podcasts, visit Hartman media.com.
Announcer 0:13
Welcome to creating wealth with Jason Hartman. During this program, Jason is going to tell you some really exciting things that you probably haven’t thought of before and a new slant on investing fresh new approaches to America’s best investment that will enable you to create more wealth and happiness than you ever thought possible. Jason is a genuine self made multi millionaire who not only talks the talk, but walk the walk. He’s been a successful investor for 20 years and currently owns properties in 11 states and 17 cities. This program will help you follow in Jason’s footsteps on the road to financial freedom, you really can do it. And now here’s your host, Jason Hartman with the complete solution for real estate investors.
Jason Hartman 0:56
Welcome to the creating wealth show. This is your host Jason Hartman. This is episode number 481 481. Thank you so much for joining me today. We have Garrett Sutton back on the show today. He is the attorney who’s written a couple of the rich dad books the Robert Kiyosaki Rich Dad Poor Dad series rich dad’s advisors, actually, he’s got some new updates on asset protection issues and maybe a little bit bordering into the tax issues. So we will have him here in just a moment. One to remind you all though, to go to the website and send in your voicemail, it’s super easy to do this, just go to Jason hartman.com. Send us a quick voicemail, it’s just a little tab on the right hand side of the website. And you can very quickly just send us a message, a question, a comment, anything you want. And we just love to hear from you. So go to Jason hartman.com. And do that at any time you have a question if anything comes up or comment, whatever, we always love listener feedback. So thank you for doing that. And then also we are almost out. We’re just on the homestretch of those meet the Masters home study courses, the physical product, incredibly discounted at $197 per month. And this is a closeout sale. So get them while you can they look great on your bookshelf. And there’s some great information there. But do check with us, by the way on updated providers. If you listen to those, we always have updates for you and things like that. So, you know, before you use anybody, whether they be talking about tax strategies or legal strategies, or different markets around the country, in terms of local market specialist, make sure you’re talking with your investment counselor at my company and we’re helping you get the latest and greatest guidance. Okay, that’s it. Let’s get to our guest today. Garrett Sutton as we talk about asset protection, here he is.
Hey, it’s my pleasure to welcome Garrett Sutton back to the show. He is founder of the Sutton Law Center, owner of corporate direct COMM And of course, you’ve probably heard his name most famously, because he is a rich dad advisor to Robert Kiyosaki, and author of loopholes of real estate, which is just a fantastic book just was translated into Spanish. And it’s a pleasure to have Garrett back, Garrett, welcome. How are you?
Garrett Sutton 3:22
Good. Thanks, Jason, for having me back.
Jason Hartman 3:24
Yeah, it’s good to have you. Where are you located today? Wyoming or Reno?
Garrett Sutton 3:28
I’m in Reno, Nevada today and the beautiful day here.
Jason Hartman 3:31
Good stuff. Well, all of you lawyers always live in these very favorable smart states. Right. Just out of curiosity, did you strategically locate there? Or were you were you raised in Nevada, or
Garrett Sutton 3:43
No. I grew up in a California in the Bay Area, went to Cal and Hastings law school in San Francisco, but California just got too crowded and to regulatory. And so I moved up here in 1989. California. Well, you know,
Jason Hartman 3:57
I left California about three and a half years ago. And I always say, I swear, Garrett, that state does not want me to employ anybody or have any businesses.
Garrett Sutton 4:05
Well, it’s gotten even worse. So if we have time, we can talk about some of California’s new rules with regard to Corporation.
Jason Hartman 4:12
Gosh, okay, okay. Well, yeah, let’s try and touch on that if we can. But one of the new things and, you know, we’re going to talk a lot about real estate investing and so forth. But one of the new things I just wanted to kind of get out of the way it may not be super applicable to real estate investors is there is a new type of Corporation, right? I mean, in the past, we’ve always known there’s a, there’s a C Corp and an S Corp. And how long has it been since they made a new one? This has got to be kind of groundbreaking, right?
Garrett Sutton 4:37
Well, yeah, we had the LLC about 30 years ago, but now we have the B Corp or the benefit Corp. And they’re allowed and I think 27 states all 50 states will have them. And it’s a really interesting idea, Jason and the idea is that you can have a corporation that not only makes money, you know has profits but to also benefit certain activities before to to do charitable work and social purpose work, you had to use a 501 c three organization that was approved by the IRS as a nonprofit organization. The problem with the nonprofit was you couldn’t pay the adequate salaries to get the work done by efficient people. So they’ve come up with the B Corp, which allows you to not only make profits, but to provide low income or underserved individuals with beneficial products or services, preserve the environment, improve human health, there are all these categories that you can fit in. And you don’t, under regular corporate law, both B and C Corp, an S Corp. Under regular corporate law, you have a duty to the shareholders to make as much money as possible, you can’t leave money on the table. With the B Corp, you don’t have to make every last penny for the benefit of the shareholders. You can have profits, but at the same time, provide services at a discounted rate so that you’re not maximizing shareholder profit, but you’re providing a public service as well. And so that’s what the B Corp is. It’s really interesting. It’s, I guess it’s been around for five years It started in Maryland. But to be honest, Jason, we haven’t had that much of a call for it. There are a few B corpse out there. But it’s not like there’s this surge towards people starting as a B Corp. I think part of it is people just aren’t aware of the this new entity
Jason Hartman 6:43
This is really most appropriate or maybe just appropriate for nonprofits, then well,
Garrett Sutton 6:48
it kind of fits in between nonprofit and social purpose where you’re trying to make a profit. So yes, it’s it’s for people that want to do good in the community. But they don’t want to be restricted by the nonprofit rules. They want to operate as a corporation, they want to pay full salaries, they want to be able to go out and and do activities on a corporate basis as opposed to a nonprofit basis. But they don’t have to make every last dollar for the benefit of the shareholders. That’s the key here.
Jason Hartman 7:20
Well, I mean, doesn’t that just fall under what’s known as the business judgment rule, I mean, if a nonprofit and you know, there’s been a lot of debate about this stuff about, you know, salaries with ALS, the bucket challenge, and, you know, the way that company, I guess I’ll call it a company, that nonprofit is managed and, and, you know, like the head of the United Way, in the past, I remember hearing complaints about you know, all this person’s making, like, you know, 700,000 or a million bucks a year or something. And everybody thought that was ridiculous. But, you know, I don’t know, I have a hard time reconciling that kind of stuff. Because, you know, number one, that’s a huge organization. And I mean, if you want to attract a talented person who’s going to make it grow, you know, they can go out in the private world and get a get a job as a wall street crook and make a fortune.
Garrett Sutton 8:06
Well, exactly right. Jason, the B Corp kind of solves that problem. You can have someone engaged in social purpose activity, but pay him that salary that the private sector would pay in anyway.
Jason Hartman 8:17
Interesting. Okay. Yeah. Because I have I have a foundation. I mean, it was set up about 10 years ago, and I don’t, I never heard anything about a B Corp. Until I saw it on your website recently. So Interesting. Interesting point. Okay, good. And the whole doing good thing. I mean, isn’t that a really big question mark, a capitalist, and an Adam Smith fan would always argue that every company does, you know, good. Right. I mean, you know that we hear a lot about social entrepreneurship nowadays. So just any comments on that before we switch gears here?
Garrett Sutton 8:49
Well, yeah, Josh, and Lisa lannon, Rich Dad advisors wrote a book on social capitalism. And it talks about the B Corp in there. Actually, I wrote the section in the book. And there are a lot of people out there who want to use capitalism to solve social problems. And so the B Corp is is kind of a hybrid entity that allows you to do that.
Jason Hartman 9:11
Yeah, very interesting. Very interesting. Okay, good. Well, you mentioned before that there have been some new regulations people need to be aware of and, you know, maybe you want to just talk a little bit Garrett, kind of as a review, you were on the show before, of course, people can go find that old episode, of course, on iTunes or at Jason hartman.com. But you talked before about Nevada and Wyoming, and those being really the most favorable asset protection states for entities. I mean, not there’s more to asset protection than just entities there’s homesteading and all that kind of good stuff, too. But take it away with whatever you’d like to discuss.
Garrett Sutton 9:44
Well, since we spoke, Jason, there has been this trend around the country where the courts are not protecting single member LLCs as much and I went back and looked at the old podcast and we did talk a lot about How LLC is offer great asset protection for both business and real estate. And the the benefit of the LLC is the charging order protection. And that basically says, If you Jason get in a car wreck and someone wants to get at your other assets, if they’re making an outside attack, they want to get at your various assets. It has nothing to do with the real estate in the LLC. It’s not a tenant suing you. On an inside attack, it’s someone coming after you after a car wreck. Well, the charging order protection says, if you’re going to come after Jason, you don’t get to sell his four Plex. Now California law does say that. But the good states, the strong states like Nevada and Wyoming say, you have to wait for distributions to be made. If the four Plex has money that it’s going to distribute to Jason, then you stand in Jason’s shoes and get distributions. And that’s really good asset protection. And since we spoke Jason, there are five states that protect single member LLC, it’s Nevada, Wyoming. And now Alaska, Delaware and South Dakota, also protect a single member LLC. But the trend across the country is for courts to say we’re not going to protect the single member LLC, for example, in California, the state will say we don’t, if you have a single member LLC, the original purpose of the charging order was to protect the other partner in the LLC. So Jason gets in a car wreck. And his partner Sue is also an owner of this LLC, it’s not fair to sue to allow someone to go in and sell the four Plex so that Jason’s creditor can get paid. Well, you don’t have that scenario with a single member LLC. With a single member LLC, there’s only one partner to protect. And the courts have said it’s not fair to the car wreck victim to let Jason not pay this judgment if it’s a single member LLC. So there’s kind of an understandable rationale behind these courts saying we’re not going to protect a single member LLC. And so in California, in all cases in California, they won’t protect a single member LLC. In Colorado in a bankruptcy case, they won’t protect a single member LLC. Same with Montana and Kansas. So this and in Florida, the big case was the Olmstead case in Florida several years ago, where the Florida Supreme Court, they had protected people in LLCs with the charging order. And then out of the blue, the Florida Supreme Court said no, we’re not going to protect a single member LLC. So Jason, that trend is spreading across the country. So a lot of our clients are looking at setting up multiple member LLC. So you have the argument, well, it’s not a single member LLC, there are two people involved here. The charging order needs to protect the second partner. So the laws of dynamic areas, things change. And it’s good that we’re doing an update now because this is changing across the country.
Jason Hartman 13:22
So Garrett, do I hear that you’re saying you’re afraid Wyoming, which has been the desirable state could go this way? Has there been any case law so far?
Garrett Sutton 13:32
Yeah, Wyoming had a recent case, the green hunter case, where they pierce the LLC veil, on a single member LLC. And so that shook a lot of people up Nevada, in a bankruptcy case, on a single member LLC, the bankruptcy court in Nevada, did not protect the single member. So you know, we have the single member LLC, somewhat under attack. And clients are starting to think about and I need to start doing the writing because this has just happened. These the Nevada and Wyoming case, are just in the last couple of months. So people are starting to think about using multiple member LLC.
Jason Hartman 14:17
So that’s kind of the trend. Now here is the million dollar question. Does that member need to be a natural person? Or can it be another entity that you own? Like, can you have, you know, one of your LLC? Can you have the moaning each other is what I’m saying? Because, you know, for example, in my case, I don’t have that many relatives, you know, or people that I’d necessarily want to make members you know, I mean, I got some but I mean, how do you do that there’s family strife out there. I mean, you know, there’s errands that don’t want their, you know, that think their kids will miss manage things and are very concerned about that. Heck, they set up whole elaborate estate plans over that issue of doling out money slowly or giving it to someone else.
Garrett Sutton 15:02
Well, actually, that’s a really good question, Jason, because, you know, I have clients that say, look, I own this LLC myself, I’m gonna keep it as a single member LLC, I have enough insurance, I’m not worried about a car wreck attack. So some people are going to stick with a single member LLC, and you know, they’ll be fine. The issue of whether you can have a second LLC be a 5% member is a good one, I would think that if that LLC was owned 100% by you, and you own the remaining interest in the LLC under attack, that might not work. Now, if that second LLC, though, was own 50% or 80%, by Jason and 20% by a nephew, you may have an argument there, what a lot of people are doing is they will set up a Nevada asset protection trust to be an owner of the LLC, and then have themselves the 5%, owner of that LLC as well. You have two separate members at that point. Jason is one member as an individual, and Jason’s Nevada asset protection trust. a spendthrift irrevocable trust is the second member. So in many cases that could work we also have clients that will just set up, you know, not an expensive Nevada asset protection trust, but more of a garden variety, irrevocable trust for their kids, and have that trust own 5% and the parents own 95%, that could work as well.
Jason Hartman 16:38
So is there a certain percentage? that’s ideal, by the way, you instantly jumped to the number 5%? And then you I think you also mentioned 20%? Is there a right number, like a percentage number that, you know, if you own one, 10th of 1%? Is that really having another owner? I mean, if I were the judge, I might say no, you know,
Garrett Sutton 16:57
Right. And the in the legal community, most people say that, you know, nine, nine, rather, I’m sorry, 5% is the right number. You know, like you say, one 10th of 1% probably isn’t a significant enough membership interest for a court to say that it’s a multiple member, LLC. 5%. Most people in the legal field feel that 5% is a justifiable number.
Jason Hartman 17:22
Okay, so 5% All right. So that’s what you do. And what kind of trust is the ideal trust to have? Is it a spendthrift trust? You know, when and maybe, can you talk a little, we haven’t done much at all about trust? I don’t understand them very well, you know, I have two of them. But I can’t say I have a big understanding of this area.
Garrett Sutton 17:40
Can we talk about that a little bit? Sure. I mean, trusts have been around for over 1000 years, the Romans use trust. So the trust is a very time tested instrument. And basically, you have a trust, it’s set up by a grant or or a settler, someone puts assets into the trust, the trust is managed by a trustee for the benefit of a beneficiary. So the the beneficiary is like a shareholder in a corporation. If the trust is managed for their benefit, the trustee has power over the trust, it gets to manage all the trust assets. And that’s why you have banks serving in this capacity as trustees. And the banks typically charge a very healthy fee for this. But they will like what’s a healthy?
Jason Hartman 18:37
Can you give us an example?
Garrett Sutton 18:38
Well, some banks will charge, you know, a minimum of $5,000 plus 1%. under management, that that would be something on a large trust, that could be a significant amount of money. So you will have people operate as trustees, and their job is to manage the trust. But when someone Sue’s the beneficiary, the person who the trust was set up for the beneficiary can say, Look, I don’t manage this money. You know, you say I owe you money, but I’m a beneficial owner of this trust, but I can’t go in and give you money because the trustee manages everything. It’s their decision whether or not to give you any money. And of course, the trustee when the beneficiary gets sued, does not have to make payments to that creditor. So that’s where the asset protection comes in. There’s a there’s also a trust called a living trust, or a revocable trust, and that doesn’t offer any asset protection, though, doesn’t know zero asset protection, although there are promoters out there saying it does just know that the living Yeah, the Living Trust is really good for probate avoidance. That’s why you set it up with with without a living trust if your assets are held In your individual name, when you pass, you have to go to probate court. And the court supervises the distribution of your assets. And the attorneys make out quite well, on the probate fees. So for example, if you had a million dollar house in California, and even if there was $900,000, in loans against it, the court when you distribute that trust through probate awards, the attorneys $20,000 in legal fees, now you can set up a living trust and avoid that whole procedure for 2000 or 20 $500. So the Living Trust makes a lot of sense, but it’s important, as you mentioned, Jason, it doesn’t offer asset protection.
Jason Hartman 20:45
You mentioned earlier, Garrett about California, you know, it seems that as I do business all over the country, it’s always like, there, there are laws. And then and then when it comes to like California, in New York, there’s a bunch of special extra laws. And I mean, no one can keep track of all this stuff. It’s completely impossible. I think I think it you know, it New Years, just this last year, and pretty much every year, it’s a similar type of number. There were something like eight or 900 new laws in the Socialist Republic of California, my former home state, it’s, it’s just crazy. We don’t even know what to think about that state.
Garrett Sutton 21:25
Well get this one. Jason, this is one of the new ones that has a lot of people upset. We have clients in Utah, and they have a Utah LLC. No, I’m sorry, they live in Utah, they have a California LLC, so they have a duplex in California. And they pay the $800 a year for that California LLC. Now we like to have the California LLC, be owned by a Wyoming LLC, right for the better asset protection, California has the worst laws in the country, for asset protection, Wyoming has still one of the best. So we have a California LLC, paying the 800 a year, a Wyoming LLC paying $50 a year in the State of Wyoming. And these Utah residents, the state of California has come to them and said because you have California money flowing from California, through Wyoming to you and Utah, you have to pay the state of California $800 a year for the Wyoming LLC. And they don’t even live in the state of California. And this has them selling the California property. They said we’re not paying $800 a year for an entity that is completely outside California. And we’re not going to be a part of this. But if you’re going to if you’re going to invest in California, from outside the state of California, you need to know these new rules that are in effect.
Jason Hartman 23:01
Well, when it comes to real estate. I mean, I don’t know why you’d invest in California anyway, that the rent to value ratios never make any sense. I mean, you know, if you’re buying properties in California, that’s really a speculators game. That’s a gamblers game, you’re just looking for appreciation, you definitely can’t make your money on cash flow. And it’s funny, I talk about California as though it’s a city. But it’s like that rule applies to the whole state. I mean, you can’t even make a deal work in Bakersfield or Fresno, really, you know, it’s I mean, it just doesn’t work anywhere. The numbers just do not work in California. If you live there, if you have to live there, you’re better off being a renter, because you’ll get the benefit of that fantastic rent to value ratio, or V ratio, as I call it. And you know, investing around the country, unless you’re just a gambler. If you’re a speculator and you’re looking for appreciation, only then Hey, have at it.
Garrett Sutton 23:47
Well, yeah, and let’s talk about the reverse situation. Say you’re a California resident, and you have a Utah LLC that owns property in Utah, that’s the more common or not even Utah but maybe Texas or one of the desert wherever, whatever state it is. All right, so you have a Utah property in a Utah LLC, or a Texas property in a Texas LLC. And that money flows, the profits flow through to you in California, you’re gonna pay tax on that. But now California says because you have, let’s say, a Texas LLC that you manage from California, the Texas LLC is thus doing business in the state of California, because you’re managing it, they’re from California, pay us $800 a year there. And so, you know, I have clients living in the state of California, who just got hit with this a year ago. And you know, some of them are considering leaving, it’s just when you talk to people at the Franchise Tax Board on this and I call him up and I said, Look, I’m just trying to understand your new rules. So I can advise my clients, but when you talk to them, this is clearly about their salaries and pensions. You know, these People at the state of California are putting in these rules. I don’t even think the state legislature realizes what the Franchise Tax Board is doing. But they’re putting in these rules to collect $800 wherever they can. And it’s really by a bureaucracy that’s trying to maintain their salaries and pensions.
Jason Hartman 25:19
Yeah, of course, it is. I mean, you know, California is just a really corrupt place. You know, it’s, it’s, it’s annoying, but you know, I gotta say, you mentioned the $800, that you have to pay the state of California if you’ve got any entity there. But you know, really in the big picture, I mean, that’s kind of it’s an annoyance for sure, compared to $50 in Wyoming. But if you’re talking, you know, the big game $800 is nothing but an annoyance. It’s a mosquito bite, right? It’s not that big a deal, the more important thing is probably the fact that you’re just not going to have any protection. And one of the things that gets complicated about this stuff, and I’m far from understanding and myself, is that you do in business in all these states and so forth, then you have to domesticate entities in in various states. And once you do that, it sort of doesn’t matter what the laws are in, say, Wyoming or Nevada, if those are the examples, it matters, where you domesticate it right? As soon as you domesticate or do business in that state. Are you subject to that state’s rules? and Wyoming is thrown out the window? Or I don’t know, I don’t understand it.
Garrett Sutton 26:26
But here’s how it works. for California. Let’s set that aside. And you’re right. I’ve talked to people in California, and they feel like I’m willing to pay $800 you know, I can make money in California. The $800 is an annoyance Fine, I’ll pay it and that’s fine. But people need to realize that if you don’t pay the 800, the penalty is $12,000. So I just have to counsel all my clients on on this penalty. Yeah. Now let’s talk about if you have a Texas LLC, Texas laws pretty good. So if your tenant sues you in Texas, you are subject to Texas law. If you have the Texas LLC, owned by a Wyoming LLC, and someone in the car wreck case comes after you. You know, we don’t have any laws in Texas or California on this. But under the current law. If you set up the Wyoming LLC, for that protection, Wyoming law applies. And so that’s why we like to have all Yeah, that’s good. We like to have all these entities form. If you own real estate in South Carolina, we use it South Carolina, LLC, because South Carolina law is going to apply but then we have it owned by a Wyoming or Nevada LLC,
Jason Hartman 27:40
It gets complicated as heck, though, doesn’t it? Managing all the entities and stuff in different states?
Garrett Sutton 27:47
And well, we provide a service and we do that for people, you know, we just have to build a team. And you know, we we provide the asset protection and the corporate maintenance. And that’s part of our job to be on your team. And so, you know, in the past, we’ve given all your listeners $100 off on the formation of an entity or an LLC, we still honor that. And so we’ve had a great experience with a lot of your listeners, Jason and, you know, it’s just we’re part of your team, we help you manage all that.
Jason Hartman 28:17
What about some of those requirements? You got to have a Registered Agent in every state? Right, right. Do you want to say anything about that, how that goes around the country. And then I just want to ask you, you know about maybe two more states before we wrap up?
Garrett Sutton 28:28
Sure. So the Resident Agent or registered agent is required. If you have it saved set up. in Wyoming, you have to have a Registered Agent in Wyoming and we that’s free the first year with us, and then we charge 125 a year thereafter. Now, if you take that Wyoming entity and qualify it to do business in New Mexico, you have to have a Resident Agent also in New Mexico. So one entity formed in Nevada, doing business in New Mexico requires two Registered Agents. So that’s how it works. And the idea the Registered Agents job is to accept Service of Process meaning a lawsuit. And so you want a registered agent who appreciates the importance of getting the filing the paperwork from the lawsuit to you promptly, because you’ve only got in most states 30 days to answer a complaint. So you want someone who’s going to get that information to you pronto. So that you can start working on filing an answer to the complaint gear.
Jason Hartman 29:34
I’ve heard some things and this may not be your area because I know every attorney has their favorites. But you know, we’ve all heard good things about Delaware. Generally speaking, I think that applies to larger companies. A lot of them you’ll notice are registered in Delaware. And then also oddly, Alaska. I’ve heard a lot about Alaska lately. And he comments on those do
Garrett Sutton 29:55
Sure. Delaware is where most of the Fortune 500 companies Are they have a strong body of case law on corporate law, they have a separate court for corporate matters. So does Nevada now. But in a lot of cases, the venture capitalists are familiar with Delaware law. And it’s it’s almost kind of like, it’s it’s their comfort zone. They just feel like they’re comfortable with Delaware. And so you’ll have situations where you’re trying to get funded with a company. And your venture capitalists will say, well, you have to be incorporated in Delaware. And if you want their money, you’ll do it. I personally don’t like Delaware when compared to Nevada and Wyoming because there are more reporting requirements, you have to provide them with more information than you do in Nevada, or Wyoming. And as well,
Jason Hartman 30:49
Wyoming, though, interestingly, you have to give them your bank balance, I think, right?
Garrett Sutton 30:53
No, no, I, we don’t. If you have a money at work in the State of Wyoming over a million dollars, there’s a little franchise fee, but most of our clients don’t do that. I mean, don’t hold that much money in the State of Wyoming. With Delaware, the filing fees are a little higher. You’re right about Alaska, Alaska just took the step of protecting single member LLC like Nevada and Wyoming did. So Alaska also pioneered the asset protection trust. Although Nevada made its law a little bit more appealing than Wyoming than Alaska did when it came out with its asset protection trust. The in Nevada the assets are bulletproof. After two years of being held in the trust in Alaska, it’s three years. So you just have a shorter time period in Nevada. But you’re right, Jason, I Alaska is becoming a popular state for incorporations as well,
Jason Hartman 31:56
Good stuff. Well, Garrett, please give out your website, tell people where they can find you. Thank you, by the way for offering that discount to my listeners, I really appreciate that. Sure.
Garrett Sutton 32:05
So the website is set law calm su T, la w.com. And if you request a consultation or information, we’ll be happy to get that to you and just mentioned Jason’s name, and we’ll give you the hundred dollars off the formation fee. So instead of 695, which includes everything, except the state filing fees, which vary from state to state. So instead of 695, it’s 595. And you can actually talk to someone on the phone, when we’re helping you out with these entities. So we’d be happy to work with your listeners, Jason.
Jason Hartman 32:43
Yeah, good stuff. And then the other thing that they need to do is maintain their entity correct? And do the reporting the annual reporting? How much does that cost Garrett?
Garrett Sutton 32:51
Well, we charge 125 to be the Resident Agent in we provide that service in all 50 states. And then if you want us to prepare the minutes every year, you are required to do minutes once a year, we charge $150 to do that. So to 75 to 75. Right. And when you form with us, we give you a book on how to do all this and the importance of corporate formalities. So your first entity, we provide you with a book that shows you how to do it, if you want us to do it, we can do it.
Jason Hartman 33:22
Any final words about you know, asset protection? Or, you know, on the tax side? I mean, I know you’re not an accountant, but certainly you you are you have to be a little bit versed on the tax issues to you know, if there are any thoughts there just in closing?
Garrett Sutton 33:35
Well, in closing, I would say that the law is a dynamic area. And in in this discussion, we talked about how things are changing with regard to single member LLC. So I think it’s important for people to stay up to date to have advisors that are keeping an eye out for you on on these legal changes. The other thing is that a lot of people like to do this themselves. And I just see people get into problems, you know, they put real estate into a C Corp because they don’t know any better or they you know, they don’t follow the requirements, the corporate formalities, and they get their veil pierced. And that happens 50% of the time. So you just want to have a member on your team that can assist you with these important corporate formalities. So we would love to work with anybody who is interested in having that type of ongoing protection.
Jason Hartman 34:28
Good stuff. Good stuff. Well, Garrett Sutton, thank you so much for joining us again, and for that generous offer to our listeners. We really appreciate your insights and your thoughts about this very important topic. So thanks for joining us.
Garrett Sutton 34:35
All right. Thanks, Jason.
Announcer 34:41
What’s great about the shows you’ll find on Jason hartman.com is that if you want to learn how to finance your next big real estate deal, there’s a show for that. If you want to learn more about food storage, and the best way to keep those onions from smelling up everything else, there’s a show for that. If you honestly want to know more about business ethics, here’s a show for that. And if you just want to get away from it all and need to know something about world travel, there’s even a show for that. Yep, there’s a show for just about anything, only from Jason hartman.com or type in Jason Hartman in the iTunes Store.
Announcer 35:23
This show is produced by the Hartman media company All rights reserved for distribution or publication rights and media interviews, please visit www dot Hartman media.com or email media at Hartman media.com. Nothing on this show should be considered specific personal or professional advice. Please consult an appropriate tax legal real estate or business professional for individualized advice. opinions of guests are their own. And the host is acting on behalf of Platinum properties, investor network, Inc. exclusively.
