Q: Can a newly formed LLC (sole proprietor - 1 owner) lease equipment from its owner?
The equipment belongs to the owner and was bought with his personal funds to take advantage of using credit to purchase such equipment. Since the LLC is new it doesn’t have any credit to purchase equipment with. The idea would be for the LLC to lease the equipment from its owner, pay monthly installments in the form of “lease payments”, until the equipment is paid in full. I guess it’s not technically a lease? But rather a lease with option to purchase the equipment?
A: Yes you can do this. You should have an equipment lease agreement between you as lessor and the LLC as the lessee.
A: Yes, a newly formed LLC can lease equipment from its owner, who is also the sole proprietor, and structure it as a lease with an option to purchase. However, it's essential to document the arrangement clearly in a formal lease agreement to avoid any potential legal issues down the line. Consulting with a business attorney to draft the lease agreement and ensure compliance with state and federal laws is advisable.
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