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LLC Structure for a single-member RIA

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Jun 19, 2014 11:56 pm

I'm planning to set up my own RIA in TX with no other partners.  It will be just myself running the show.  Any advice on how I should set up the LLC?  Should it be a single-member LLC taxed as a sole proprietor (disregarded entity)?  Or should I set up the LLC and elect S-Corp filing?  I know there are a bunch of "one-man show" RIAs out there... please advise on how you've set up your biz entity.  Many thanks!

PS-- I am married, and theorectically could put my wife down as a member as well, but if that's the case.. wouldn't I have to disclose her name on RIA registration, Form ADV, etc.?  I don't want her name associated with my business in anyway.

Jun 26, 2014 2:01 pm

I’m not an attorney. It’s probably best to check with one just to be sure as you are setting up a legal entity but here are my thoughts:

Roll with the single member LLC. It’s a pass through entity so the income of the business will flow down to your personal income. I’ve operated my RIA as a single member LLC for 8 years and it’s proven to be the great structure.

As for listing your wife as a member you should try to avoid that unless she’ll be active in the business.

Jul 29, 2014 2:54 am

If the cost in your state is the same or comparable, I’d just go with the LLC. I started out going as a sole prop and heard back from folks at the state saying I would be much better off with an LLC structure. (this was from the department of financial institutions, the agency in charge of approving my RIA)