by Guest » Thu Jan 31, 2013 10:31 pm
Thinking about making a LLC or Corp just for the purpose placing one of my cars in the LLC/Corp and insuring it for my 16 year old son to drive.
Anyone ever do this?
Wondering how the insurance company would rate it and what it would cost.
Anyone ever do this?
Wondering how the insurance company would rate it and what it would cost.
Posted: Sat Feb 02, 2013 07:19 pm Post Subject:
Such "phantom" corporations are generally held to be unlawful in a court of law. There is no legitimate purpose served in doing either of those things. It will cost you hundreds or thousands of dollars to establish and maintan a corporation or LLC (in CA a LLC must pay a minimum annual tax of more than $800, even if it has a $1,000,000 net loss). For what? To shield you from the liability of your son's poor driving skills?
You can do that for about $200 by purchasing a $1,000,000 umbrella liability policy. The only downside to that is you must carry high limits of liability in both your auto and homeowner's policies -- which will increase the premiums on those primary contracts by a few hundred dollars per year.
But that's far less costly than setting up a sham corporation or LLC that, in all probability, won't offer the "protection" you think it will if you are sued.
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