How to Use an LLC for Vehicle Ownership

By Heather Frances J.D.

A limited liability company, or an LLC, is a business structure that protects the owners, or members, from liability for the business' debts, while avoiding some of the formalities and negative tax consequences of a corporation. Since LLCs and other businesses are considered legal entities, they can own vehicles in the same way that an individual owns a vehicle.

Setting Up an LLC

Before an LLC can own a vehicle, the LLC must be created according to the terms of your state's laws. Generally, you must file articles of organization with your state's business registration office to form your LLC. These articles provide the basic structure of your LLC, as well as its name and the identity of its owners. Once you have filed your articles of incorporation, your LLC has a legal identity and it can own property in much the same way that an individual, corporation or other legal entity owns property.

Transferring Vehicle Ownership

You can transfer vehicle ownership between legal entities, just as you would transfer a vehicle between individuals. Typically, this involves a bill of sale or other transfer document from the seller to the buyer, such as from an individual to an LLC. Then, the LLC must apply for a new title with your state's department of motor vehicles or county treasurer. The LLC acts through the actions of its members, so a member or other LLC representative must sign the title applications and other documents on behalf of the LLC. It is likely that the LLC will also be required to purchase vehicle insurance for the car under state law requirements.

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