Key Takeaways
- Entity risks span legal (veil piercing), administrative (missed filings), tax (misclassified elections), and insurance (wrong-entity naming).
- A compliance infrastructure includes an entity calendar, document repository, financial controls, and annual legal review.
- Dissolve entities when no longer needed—zombie entities accumulate $500-$2,000/year in unnecessary fees.
- Fraudulent transfer laws prohibit moving assets into entities to evade existing creditors.
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Test Your Knowledge
1.Which of the following is NOT one of the four categories of entity risk?
2.What is the typical annual cost range for zombie entities that an investor fails to dissolve?
3.A compliance infrastructure for a multi-entity portfolio requires which four systems?