Buying commercial property is a major investment, but deciding who should own it is just as important. Purchasing the property in your own name or through your business can affect liability, financing and your long-term plans.
Here are some factors to consider when deciding which ownership structure is right for you.
Your liability exposure
Buying commercial property through your business may help protect what you own personally if legal or financial issues arise. In Minnesota, many business owners choose to own commercial property through an LLC to separate their personal assets from company obligations.
That does not mean it is the right fit for everyone. The level of protection depends on how it is organized and whether you want to keep your personal and business affairs separate. Because every purchase is different, it is important to understand how owning the property personally or through your business could affect your level of risk.
Your financing and business goals
The right ownership structure should fit the way you plan to use the property. For example, you may occupy the building yourself, lease part of it to another business or hold it as a long-term investment. Your financing options can also vary depending on whether you or your business will own the property.
Thinking through these practical issues before closing can help you avoid changes that may be more difficult or costly to make later.
Your long-term plans
Your ownership decision should support where you want your business to go, not just where it is today. If you expect to bring on partners, grow your operations or eventually sell the business, the way you hold title could affect those future plans. Looking ahead now can make those transitions easier when the time comes.
Build a strong foundation for your investment
Choosing how to own commercial property is more than a paperwork decision. It is an opportunity to protect your investment and position your business for the future. Before you close on a purchase, consider speaking with an attorney who can evaluate your goals and help you choose an ownership structure that fits your needs.