U40 – Review & Discussion of LLC Banking Abstract
0:02
Well, hello everyone, this is John. Jay, thanks for joining.
0:07
Today is July 15 Thursday.
0:09
And I know it’s so exciting to talk about contracts.
0:13
I just wanted to go over the banking abstract that we’re all using. Not that I mind feeling questions, but I just want to, I never really have done this before. I wanted to explain my thinking and how this document has developed over the years.
0:26
It’s just, it’s not necessary, but it’s just my way of Helping people get into the banking system, which is what we’re really trying to do here.
0:33
Um, As you know, a lot of my content is on ace coins dot com.
0:39
We’re going to add something new. coming up in about a month. There should be a phone number there. You should be able to call and get a helpdesk. That doesn’t mean you’re just gonna get me all the time, you’re gonna get people that Actually know My material, my content, and are pretty good at it. So they should be able to answer questions. And if not, they can get me on the phone. Sometimes they can do a three-way. Sometimes They can schedule a time and not three months out. So that’s my intention, anyways. I think we’re going to work it out that way.
1:05
So anyways, that’s coming. I’m working really hard on that.
1:08
I’ve got some good people I’m working with, so I appreciate your patience.
1:12
And then, of course, we have the video membership, which is privacy fight dot IO, and I believe there’s a couple of URLs that go with that. I think, privacy, fight club, dot com, and privacy, fight dot com, or something like that.
1:22
But anyways, privacy, fight dot IO, um, so I wanna get started with this. I’m gonna do a screen share.
1:30
OK, so what I wanted to cover today would be, and I’m sure we can discuss it to you guys, are welcome, to chime in. I’m gonna probably take a break every once in awhile.
1:41
I don’t think we need more than 15 or 20 minutes.
1:43
I wanted to go over the 6 or 8 pages we use as the banking abstract. Looks like it’s maybe 10 pages, and explain what my thinking is on that, and why I feel like that strategy has been effective over the years.
1:55
So, when I set up a limited liability company, I have a set of documents that allow you to hopefully easily open your account at the bank.
2:04
The reason why there’s even a question is because of the way I write these, I don’t write these like some attorney or some CPA because those guys will just make you a single member owner, not even talk about it and you just assume that this is the right thing to do and everything’s protected OK.
2:18
So when I’m writing something to protect your interests and give you some versatility, the banks don’t like it. It becomes obvious. And so, we kinda have to weave our way through their let’s call it the gauntlet of policies they have.
2:34
And that’s why I have, in fact, I’m not going to show you today, but I will talk about it.
2:38
The banking abstract I’m talking about, goes with a set of instructions that explain a little bit more, and also has some strategies in there about how to interact with the bank. So let me just do a screen share here.
2:51
No.
2:54
Here we go.
3:03
I remove myself off of there.
3:06
Don’t want to distract too much. Well, I’ll just write in any case. What we’re looking at here is what you guys, if you have an LLC for me, you see here, it’s a memorandum of articles of association. OK, this is supposed to reflect the same information that appears in the articles that are filed with the State, and in this example, we’re just using New Mexico, which is a common, by 80% of everyone I’m doing this with, or they’re all using, mostly New Mexico? Let me just list for you, again. The states that are, in my opinion, the best, and the reason why they’re the best is, because they leave you alone.
3:39
You’ve got New Mexico, Excuse me, New Mexico, Wyoming, Arizona, Colorado, those I really prefer simply because they leave you alone.
3:49
I don’t care about all their statutory benefits and things, like in Wyoming, that doesn’t really matter, in my opinion. You’re gonna get those anyways, OK? You can get those by just using your, your LLC properly. I also like Florida and Georgia.
4:03
Ohio is also good. So as Pennsylvania, now, Pennsylvania and New Mexico don’t have annual fees.
4:10
So just just, I wanted to mention that again. So here we go. We’re looking at this memorandum.
4:15
This is a basically a representation of what we’d filed in the state.
4:21
You can walk into the bank, or you can upload your articles that directly come from the state with a State seal or stamp on them. The banks will accept a copy of the Certified Copy. This is a summary of that document.
4:35
Many times the bank will accept it. Now they just they ask you for things like this, so I just have it ready.
4:40
So as you can see, basically we’re restating everything in the articles.
4:44
You’ve got XYZ Company, LLC. We’re saying it’s a New Mexico company, OK.
4:48
Here’s the data was formed, all this stuff, OK, I’m just giving some very simple statements. Here are common things.
4:54
It’s basically, in this example, we’re gonna, this is going to be an example where we have a single member LLC and in this case, I’m using a trust, or you would know it as a PMA or an association, as the owner.
5:07
It can be a two member, just as well, OK, same idea, As you can see, here, I use the name Allen. Right? Now, if I’m going to use this document for a company, I’m setting up, I’m going to change Allen Rights name to my name.
5:21
Because if I’m going to sign for it, I want my name on this document, and it should match my ID that I’m going to use at the bank.
5:28
Now, the registered agent address, if I’m gonna register a company here in Florida, I don’t mind putting my name here. And I have to give a physical address, though. So either it’s probably going to be my home address.
5:40
Or if I have an office space, it has to be a physical space. It cannot be a mailbox.
5:44
So any place where I can receive mail and the name of my company, that’s a physical location. With a doorway, you know. You can walk in and go there. I can use that as the registered agent address, and I can put any name I want. I can put my name. I could put Charlie Brown. I could put any name, anything. I could put the name of a company that doesn’t even exist, Nobody cares, OK. It’s just that.
6:05
If I use whatever name I do use, if it’s somebody who actually is using that name and it’s not me, I have to get that person’s permission. So if I use a fictitious name, I’m using that fictitious name so it’s not bothering anybody and I can do that OK.
6:17
It’s not going to be a violation of any kind, but it’s a serious matter to use someone’s name and address as an RA, a registered agent, without permission. Now that’s not to say that, if I’m doing this in New Mexico, for example, and I just pick an office address, like I’ve explained, and I put my client’s name or my name at that office address, that’s OK. They may not like getting a couple of pieces of mail, but no one’s really going to care.
6:40
OK, that is not the same as taking an actual human being, another person, or company name, or an agent’s name, and using it without permission, that’s a no-no.
6:51
So we’re definitely not going to do that.
6:53
So, and you’ll notice throughout these documents. I’m always saying, Look, I don’t have exclusive rights here, OK. That’s what this is really all about. I’m very careful about this because I know that the bank is going to get this document.
7:05
I also know that even though the articles that are on file with the state are binding on the bank.
7:11
That means if I if I have my articles where there’s two owners, the the bank is precluded from allowing a levy on any members debts in the company.
7:24
So like if one of the members has a debt to a third party, the Bank cannot honor alevi for that individual member when there’s another member, because of the charging order protection, OK?
7:35
So the bank is bound by whatever I put on the articles with the state. But just the same, I always account for human error or incompetence, and I try to put this in the document. So I try to, I try to get the bank to open the account, exactly the way we want it to be done.
7:49
Now sometimes, Depends on the client, though.
7:52
I mean, sometimes the client wants to just avoid the hassle of that hassle and start out with himself as the single member manager. And then after the accounts are open, they wants, he goes and changes the, the owner. And as puts his brother on there and doesn’t tell the bank or changes it for a trust or a private membership association or some other entity, OK. We can do it that way.
8:15
But anyways, I like to start out the right way, from the beginning, there’s no reason why we shouldn’t and 99% of the time or more, we get those in, OK?
8:22
Is sometimes there’s a bit of a struggle, but we get them in, so here we go.
8:26
No standard language, You guys have seen this.
8:30
Now, notice how the person who’s signing Allan, right, is the authorized signatory. If I change this to my name, of course, it’s very simple, right? I am the authorized signatory.
8:40
This is for the banks, interaction.
8:44
I could tell someone at a meeting that I’m the CEO and I in fact, may have that role, OK.
8:50
It doesn’t matter what I say here, when I’m talking to people in the real world, All I’m trying to do is, keep it to where my client has the least, liability to the value or assets in the account.
9:01
That’s what the third party of the bank, and so that the bank doesn’t ***** it up by mistake.
9:06
Because you can be legally correct on something, then there’s a mistake, and then what do you have to do? You have to get a remedy for it. And if they don’t want to remedy it, then you’ve got what Sue people And I don’t wanna get in that situation. So, as as of now, it’s been almost 30 years, I haven’t had that situation, So, it’s looking pretty good.
9:21
So that’s first page, second page. I call that an operating agreement.
9:26
It is not, It just says operating agreement.
9:29
I do that for the bank’s benefit, so they’ll leave you alone, OK.
9:34
And I put some standard articles here, all right. I did talk about membership.
9:40
What I’m still trying to do is establish that the seiner can do what he’s doing.
9:47
He wants to sign for this company, and yeah, it’s owned by a group, OK? It has this name, Alan, right PMA.
9:54
I could give it a more complicated name.
9:56
I might call it the the allan, right, Facebook fan club, PMA.
10:03
Here it’s just very simple, Alan, right? PMA? I could leave at Allen right PMA. I kinda like to leave your name whoever the signer is going to be in the name of the PMA and some version of it. Because, again, we’re not dealing with very bright people at the banks. That’s really the only reason, and they seem to go along with that a little bit better.
10:17
I can give it a completely different name, and that should not be a problem, but, again, you know, we’re dealing with people that are just not very sophisticated.
10:26
Now I did put something here, and I refer to it here, regarding the Bank Secrecy Act And I wrote this compliance memorandum now, some of the stuff I got from, it was already in already.
10:37
In fact, I think I got it from the some sort of SEC type legal website or something like that. But a lot of these I just wanted to explain in there that the purpose of this memo is to show the bank employee that the PMA, if it owns the LLC is not the account holder. And the bank is not required to collect information regarding the PMA. Although they did, they insist, OK. So we just want to let them know. So don’t get all tied up in a lengthy discussion about the PMA. Don’t let the Bank do that, say like hold on a second.
11:08
The PMA is an owner of the limited liability company. The LLC is the account holder, OK, I’m the seiner. I’ve given you all my ID.
11:17
I’ve identified the account holder. I’ve given you its articles. It is registered with the state you verified that, so that’s what you’re required to have.
11:24
This be a BSA memo. It’s going to explain that. So this usually, this is shown to be really helpful.
11:30
I think I started this about two years ago, so, Now, the truth is, if you’re acting on behalf of another party for the owner of the LLC, it’s considered a trust, so, especially when the owners, a PMA, or trust, or something, you’re the trustee. I don’t like to say that too much because then they start going Oh, wait a minute. The bank employees start asking, Oh, you’ve got to show us that trust document. No, we actually don’t, Trust is not always in writing.
11:54
So, again, this is, You know, I’m trying to make this to where the banks can read this. A lot of times, you don’t assume that this is being read.
12:01
I’ve found that, I’ll go back and forth with someone on, on occasion, and I’ll find out that, I’ll just say something, like, make sure that the person you’re working with at the bank makes sure he reads the BSA compliance memorandum and then the next e-mail, I get it as, oh, great.
12:15
Yeah, he didn’t read it, so when I showed it to him at work, and then he was able to, his boss was able to open the account, All right? So, again, here we go. We’re talking about managing risk, and I just put that in here for for information, OK?
12:31
The third party has no interest, OK. This means if there’s no interest, there’s no liability. I just want that of record, and I want the bank to have it, because just think every time you give something to the bank, it’s been available to every three letter, agency and bad guy, so to speak, that wants to get it.
12:47
So, you’re actually giving this to all the regulatory agencies.
12:51
Um.
12:55
So, what I put, I put this here for, I’ll just explain the statement here.
12:58
If a third party, like the bank is telling you that you must be a 25% owner.
13:05
See, normally it says, if you’re a 25% owner, anyone who, who is, has to give his ID, OK, fine.
13:12
But it doesn’t say that you’re required to be. There’s no reg that says, you have to, you, you’re required to be. But when we kinda call them on their, on their scam their scheme.
13:20
And we’re not, And we figured it out. And they said, Well, wait a minute. You actually have to be a 25% or more owner.
13:25
And the reality is, is that you’ve spent a lot of time and effort, presumably creating a company, establishing the Company’s Rights and Obligations, in a way that manages risk you perceive that you have in the most effective way, K the least risk.
13:38
And if someone comes along and just pulls that, you know, pulls the the bottom of the House of Cards out and topples the car. It can topple the House of Cards down, right? Well, if the bank is coming along, it has no interest in your company and you want to provide, you want to pay for service the bank is providing. And the bank says, In order to do that, you have to change the way you’ve decided to manage risk.
14:00
So my response to that is, OK.
14:02
If I’m going to do that, then you’re going to indemnify me for that.
14:04
You’re going to take on that risk, that you are changing, that I’ve already decided how I can effectively manage it.
14:13
If you think you can manage it differently then, go ahead but you’re going to have to sign a contract. That indemnify me against the risk I was going to take. And, What’s the risk? Oh, I don’t know, it’s unlimited dollars. How about that?
14:26
So, that just makes it the point to whomever you’re dealing with at the bank, I think, anyways, and it helps you understand the importance of what we’re doing here, because you’re the boss, OK? This is how you’ve chosen to manage an asset. And so this is how you want to interact with people, hey, I’m the boss, I decided, how am I take this risk on? You can’t just tell me that, I have to be an owner in this company, and do all this other stuff.
14:46
Do you think the CPA that opens an account for IBM can be required to own a percentage of IBM shares to open an account? and be a signer? I don’t think so, right?
14:57
Same thing with the church and so forth.
14:59
So anyways, this is all kinda like filler stuff, OK, I made a couple of additions here, But basically, it’s enough to meet the Bare, the bare minimum standard, of what would be considered an Operating Agreement. Obviously, it’s not. I give you an operating Agreement that goes with this. It’s a separate document We’ll talk about that later.
15:18
There’s a banking resolution now here’s why this is cool banking resolution.
15:22
This is a resolution by the company Resolving or design deciding that some individual is going to be or having the authority to sign for the company at the bank And so let’s say let’s say Alan right here.
15:37
It gets to be the Seiner, and so he’s going to fill this out.
15:40
And, you know, sign his name and all this, This one document Gives the bank what it needs to say, OK? We’ve, we’ve got the guy, the girl, whoever.
15:50
It’s going to be the signer for this company that’s responsible for everything, that’s all they really want.
15:55
all right?
15:57
If I want to add somebody, I don’t need to name him here. I don’t need to make him an owner. I don’t need to include his name right now, But let’s say, six months from now, I want to add a partner, or my brother, or, or a family, or family member or something. I’m doing something, whatever I need. Maybe I need someone else to, for some convenient purpose to be a signer for this account.
16:17
All I have to do is you see how I’m scrolling here? I would just go open this document. Now notice this isn’t Leiber office.
16:23
So I give you the Labor Office document, and I give you the PDF document, the PDF is, so you can look at it quickly, and it opens fast, you don’t have to download software to read my document.
16:31
If you want to use my document, edit it, You’re welcome to import it to Microsoft Word or whatever if you want to and go from there, or you can just use Leiber office. If you use labor office or whatever you would, you would copy this page so I would scan I would, I would highlight this page, OK.
16:46
I Would, I would A control C or you know, right click, or whatever you guys do Copy this page, and I would come down here and I would insert a page, OK? And then I would copy it over.
16:58
And now I would duplicate the banking resolution page, and then on that second inserted page now, I would go and change the name and I would put the name of the other person.
17:06
I want to be added as a signer OK, and then he or she would sign the document, and I would take that single document with his ID and every whatever is needed the bank wants really.
17:17
Not all of these documents. Again, just a banking resolution.
17:20
You would take that into the bank and add an authorized user.
17:26
That is the purpose of this banking resolution.
17:30
It’s kind of a nice tool, adding an authorized user.
17:34
You just need to copy this banking resolution, OK, and edit it.
17:39
Here, you know, the Bank may want another one of these I don’t think so, I mean, if so you’ll know what to do. You just copy this document, OK. It’s what, two pages maybe, and you would say whatever the beneficial interests are.
17:51
You guys will it should have an idea by that time of what you want to, how it to appear, white, how you want it to appear. You can see how I start them out.
17:59
You’re welcome to change them however you want, especially when you start understanding how to manage risk by establishing property rights.
18:06
I start them out as you don’t own anything and the PMA owns everything, or no individual member.
18:12
If I have two member LLC owns anything and both members together jointly and severally own everything, so that way there’s no, they’re both 100%, OK, that’s what it looks like. And, yeah, both have to do KYC, no problem. It’s probably a good idea in that case. Don’t be afraid of KYC, OK? It’s just, it’s this interesting.
18:30
You can avoid that in some cases, OK? Yeah, especially with a PMA. I mean a PMA is just an organization. A PMA, A PMA could be your fraternity in, College It can be your neighbors. They have something in common, right?
18:43
They live in your neighborhood. It could be your family. They have something in common, right? It’s also a private, because not many people can be in your family. It’s very exclusive.
18:51
So private membership associations, we interact with them all day long.
18:55
Your h.o.a.s, a private membership association.
18:57
It goes on and on. So all I’ve done here is get the idea of the association.
19:02
I gave it a name and I called it a private membership association. I can also call it an Unincorporated Association. I can also call it a private association, association.
19:13
I call it a club, I call it my fanclub, I’m called a society, OK? So don’t get stuck on one little thing, but you can see here. I’m still trying to advise them.
19:24
No. Guys, you don’t need to see all the info on this.
19:28
Here’s why, and we scroll down.
19:30
OK, Now before we get to it, that BSA compliance memorandum, this I took right out of the statute you guys can go look this up, OK, 31 CFR Part 10 ten point one hundred F F, that’s what it says in there.
19:45
I didn’t write this.
19:46
All we’re doing is saying that the use of this account does not meet the criteria for what would be considered money laundering and we’re providing the bank with a certification of that fact.
20:00
It’s that simple, and it’s not required. I mean, the banks not even care about that.
20:04
I’d just like to put that in there because it’s just let them know that I’m cognizant of what’s, what’s going on here.
20:10
And I understand the law.
20:12
I mean, you could probably eliminate this. I’ve just found that I think things go smoothly. when you do that. Then we get into, OK, so here’s the last part of this.
20:21
So, yeah, I guess this is 10 pages.
20:23
I must have added something at the end. So this is what I call the Bank Secrecy Act. Compliance memorandum.
20:31
And this is their internal language. OK, I got this from the banking system. I went and looked up their internal language. I did a lot of research and all the different banks. This is not as simple as you see it here, but it took me awhile to put this together.
20:44
This is what the bank employees understand.
20:47
This is why I use their language. I’m trying to make it easy for you guys to open accounts under the circumstances, OK, without giving up everything.
20:55
So, I go ahead and give them a little intro.
20:59
Here’s the legal citations.
21:01
Attornies love to see that, and I’m, This is, these are the most important parts.
21:07
I’m telling them how to do their job, OK, Hopefully they don’t know that I’m telling them that, because they don’t really take kindly to that.
21:14
There’s some references in here. Footnotes. I give that for the benefit of not your front end person that you’re probably talking with, but the attorney who maybe look at this.
21:22
And hopefully, after so much time I know Caleb and Brown don’t. They don’t. Those guys don’t even look at these documents I’m sure anymore.
21:30
They just, you know, when they see that you guys are working with me, they just, they open the accounts because they understand this.
21:36
So and I put here’s my memorandum, OK.
21:38
So these are legal citations saying, look, your bank is off the hook.
21:42
You guys don’t have to investigate the PMA, or the trust or whatever, and I go and restate it again. I’m trying to be very thorough here.
21:51
So what I have here is I just put the name of the PMA. Now if you get this for me, I’m probably gonna put something like the right society, or the Alan, right? fan, club, PMA. It’s going to be some version of that. So you’ll see this on your document. Wherever I called it. Now you can tell me a name to call it. I don’t ask you for that in the order form, but when you go to approve the document You can asked me to change the PMA. I can certainly do that. It doesn’t really matter.
22:16
And so I’m just saying Look, this here is a PMA, and here’s Here’s what’s going on with the PMA, OK, it’s this type of organization. It’s a private membership association, OK? Here’s what its purposes.
22:28
The Bank will want to know membership here.
22:33
Officers, standard stuff, you see on it there, the members are, the officers are selected on an ad hoc basis.
22:44
That means I don’t have any right now, and maybe I’ll select some in the future, but I’m not sure, and there’s no problem with that.
22:50
That’s how new businesses are started, they should know that.
22:53
And then, here we go.
23:00
It was never formed as a legal entity, it is not a legal entity, OK?
23:04
It is literally an association, just like your family is not a legal entity, it is already an association.
23:10
Let’s see what I have here, OK, so that’s the last page. All right, cool. So there you go, That is the banking abstract.
23:15
I hope that unwind some of the thought processes that this thing has been developed for at least, I don’t know.
23:22
Probably 22 years, OK.
23:25
It just comes from feedback, I get while working with clients in different situations.
23:30
I’m trying to create protections for the client and be consistent with what I’m promising, the client, and also give him the quickest access to what he needs to do. Deal with third parties.
23:41
OK, so there’s a, There’s a balance in there, so hopefully I’ve met that. All right, guys, I’m gonna stop that end.
23:47
If, if, hopefully we have conversation on that particular subject. I know you guys are probably eager to ask me other things, if you would, please just, can we stay on this?
23:56
Anybody want to tell story, but they’re banking abstract or the Bank said I got a question.
24:02
Yeah, John, Jay. You said that the banking resolution, you basically replace it with the new one if you’re going to change to a new signatory. What?
24:13
What I’m doing is changing to A from me as an individual to my MA.
24:20
And how would I be a signature signatory for the PMA? If they’re looking for someone signature, well you’re really signing for the LLC so you can change the ownership however you want but that doesn’t really affect the bank at all.
24:31
Sure. I can just sign my name and they’ll accept that. Yeah. Yeah. Once you’ve got that set up, you can keep changing the ownership anytime you want.
24:39
It doesn’t change, but I would not go and go to the trouble of telling the bank because they freak out and say, Oh, you might have to open a new account, you know? An excuse to open a new account, just avoid that.
24:47
So do I need to give them the document? If I change the signatory, you don’t.
24:52
While signatory OK, the owner no signatory.
24:56
What they’ll probably ask you to do is open a new account if you add a signatory, no problem.
25:01
If you add an authorized user, then that should be fine.
25:05
They’ll probably let you do that in the same account.
25:07
OK.
25:07
So basically I’m changing my LLC from my name to my name, PMA.
25:15
I don’t really even need to give them a banking resolution for that doing.
25:19
That doesn’t make any sense. You’re signing as signatory for the LLC period.
25:24
If you want someone else to sign for the company and not yourself, then they’ll probably ask you for a new banking resolution and to open a new account. If you want to just want to add somebody to sign for the LLC, then, that that should be, just like I described here.
25:37
PLAs doesn’t factor into all that. Just PMA just happens to be an owner. The don’t get fixated on the PMA. That’s just an owner of the company.
25:45
OK, so basically what I’m doing is I’m first I’m changing it with the state.
25:50
And after that, I don’t really need to even go to the bank.
25:53
Yeah, there are two different things. If I change the ownership, that’s one thing, if I change this signature, that’s a different matter with the bank, I got it, right, OK. Perfect, thank you, OK, alright.
26:06
So I know this is a boring subject, guys, but hopefully this will, I’m sorry, did you want, anyone?
26:12
I’m gonna be rambling on If you don’t stop me, You can just unmute or raise your hand or something.
26:18
Matthew.
26:20
Oh, add a question. Yes, yes.
26:25
Yes, go ahead, Matthew.
26:26
OK, OK, so How do your I don’t know if I set my LLC up with you before you started doing the …. So I actually had a PMA and trust done with Genoa Holdings. And with teeth, are yours much different than then here’s the way they’re structured. Yeah, I think he probably has a very specific purpose, and in fact, he’s got a series. He’s got a tutorial that explains everything. I don’t do what he does, I name a PMA that you’re already involved with I don’t write up all the terms.
26:59
Now if you come back to me later and say, Hey what about an estate plan of some kind, I will sit with you and develop the Articles to the PMA, and we’ll do that based upon what your plan is.
27:11
So I don’t like to just provide you with a document that’s done.
27:15
OK?
27:15
Could you do that with an existing one that I had set up with him, because, you know, I’m not going to lie, I come I came on a little bit late.
27:22
But the way everything works as far as the LLC and what it owns, versus the trust, and what it owns, and the PMA.
27:29
Just I wish there was. And I went through some of those training but with that, that he has on there, because when I bought the pipes, it came with them.
27:36
But it’s still just was over my head and I just wish there was a good video, and maybe maybe there’s something you can do. Well, you actually have an example and you say, OK, I’m, so and so and I start this, LLC, and then I, this is how I open a bank account and go through all the steps, OK. Now I did this and I’m gonna put it in a trust. And this is the difference why. A trust is different than the LLC, and then the PMA is.
28:00
Where does that actually get involved with, with all this? Because like I said, I’m just I thought I had it, and then one thing happened in it, and it basically just that’s everything that I thought I knew.
28:12
Didn’t make any sense anymore.
28:14
And I’ve just been, like I said I’ve been struggling with trying to see how it all fits together, you know? And I don’t wanna get off on that, but you talking about the PMA, I just I’m still, I guess lost on the difference between a PMA antitrust. What on what? What’s better as far as asset protection? Or is it better to just like a lien on, on an asset, where if anyone were to try to show you and it’s only worth, like, let’s say 200,000, and you got a 500,000, or 450,000 darlene on it? They know that if you had to liquidate that offset, the lien holder, whether that be your trust, or LLC, or PMA, or you. personally. Your, you know, whatever. is going to get the money before they were. So, there’s no point in doing. So, Yeah. That’s OK.
28:57
There’s the terms and concepts, but let me see if I can explain it I Like to keep this simple. So if if you’re coming to me and say, look. I have this, um, this risk.
29:06
I want to manage and say, OK, let’s, let’s do 1, 1 simple thing, let’s just make it to where you’re not the owner of it, OK? That’s all we’re doing.
29:14
This whole conversation here for years is about that not be the owner of the thing and control it, So How do I do that? I can have two members. I used to just have my client and, or two clients, or I have my client, and his friend, or a client and partner.
29:28
And make it to a two member limited liability company so really, the LLC protects everything. It’s already done.
29:34
But if it gets challenged and there’s a personal debt of one of the members, the fact that there’s another member would block the debt from reaching into the company for that one member’s debt. That’s why you have a second member.
29:49
Now you bring in some other owner and said the two members. You bring in a trust or something. Well, then, OK, certain. Now it’s an innocent party. It’s completely separate. Here’s the thing about a PMA, it does nothing except own your LLC. It doesn’t drive a car, It doesn’t open a bank account. It doesn’t have to have a contract with anybody, and I suggest that you not use it for anything else.
30:08
So it will always be an innocent party, but here’s how here’s how I do it: Your family is already a PMA.
30:16
So let’s just say your family has five people.
30:18
So the five people in your family, and you can call your family, whatever you want, but I’m going to call it the Smith Family.
30:24
Who cares? It’s just a label. It’s a name.
30:26
So the Smith Family exists because it exists, It’s a family. I didn’t, it doesn’t exist because I wrote up a document. Like a corporation exists only because I wrote up a document for it.
30:37
A family exists because there’s real people, OK, So, if I just give that family a name and call it a private membership association, then that’s what it is. I have the right to do that and then I’m just saying, OK, this group of people has the right to have to own this thing.
30:54
And it’s innocent. It doesn’t do. no, one’s ever going to sue my entire family right, it’s never one person together.
31:01
So that’s the limit of what we’re doing. I’m just, I’m just using something that already exists and making that the owner.
31:07
Right. Is that. Is that OK?
31:10
Just that part.
31:11
Yeah, yeah, I mean, you know, maybe I’m I’m trying to think about it.
31:16
Know maybe I’m just thinking about it too much making it, you know, over complicating it. You know, I, just as much as like a smart guy but he’s pedantic and I can tell you I know so much. Oh, good, OK, that’s I appreciate that, Yeah. Well, OK. So a PMA can just be an association. Let’s say 22 guys coming to me And they go, Hey, look we’re running this partnership, and we’d like your idea. Can you set up a deal LLC for us? And we’d like your … your trust idea. So I say, OK.
31:48
I’ll make you guys the association that owns the company together. You’re the association, the single association that owns the company, and I’m going to call it the, the Warner Brothers Society, PMA.
32:00
The two of you guys are the Wonder Brothers Society, PMA.
32:03
They understand that.
32:05
And now that name becomes the owner of the LLC.
32:08
Now, the better way to do it is to make the two of them individually, the owner of the LLC because you’re gonna get charging order protection. but I can also make the association, the owner, because the association is just a group.
32:18
And so that’s my core strategy is to divest my client of his right over the property, is exclusive right by conveying it to a group.
32:29
That’s it.
32:30
So everything you’re seeing me do, here, is just one way to do it, another way to do it, another way to do it, OK, Is that OK?
32:39
OK, yeah, so, so then that, that makes me wonder when when I had you start my LLC for me, I’m the only managing member would you suggest adding my wife or?
32:53
Or You know as as a Seiner or you know, someone that basically if, if something were to happen to me she could still get into the account or she can still, you know, liquidate the asset you know that that the the LLC owns or whatever a really good question that we need to do, OK, for her access to it, it comes down to you giving her the credentials.
33:12
She does not need to be a signer because that would require a third party to approve her access and that’s not necessary.
33:22
I could just get a blank check, and signing something happens. She could just yet write a check to another, Yes, and go, Yeah, Yeah, OK. I’ll give her the credentials like you said to log into my online account and chicken, wire transfer, or move it.
33:37
How are you going to know she can step in your place and keep using the account?
33:40
Even if you’re a …, Yeah. Yes, You could do that. So that’s one way to do it.
33:45
Another way would be OK, so if you add your wife that that doesn’t give you the charging order protection. It’s not a separate party.
33:53
It’s actually considered a single member, husband or wife, all right? So you would add your brother.
34:00
That’s how I used to do it. I would add a person’s brother. I would ask the client, is there someone I can add here, who doesn’t really care if you use his name?
34:05
Your brother, your mom, and then we’d have this conversation about, oh, my gosh, what kind of liability do I have? if I add, you know, we have that conversation, which is zero, it doesn’t create a tax liability.
34:16
So, that was the awkward way of doing it.
34:18
I didn’t want to give my client a trust, because way back in the early two thousands, I would have had to write up a trust document, and then it gets really complicated. Now, I’m layering companies that I really don’t like to do that.
34:29
So what I’m doing now is if it suits the client’s needs, I would use it I would use a PMA. That’s an innocent party. It does not have charging order protection, but it still gives you the separation. So I don’t care about the statute. I still have my charging order protection, OK? If I have a partner, a real partner, I’ll add them in there.
34:45
So here’s what you would do if you’d like the idea of the PMA, or you want to separate. Let’s say You have a claim. Someone’s maybe suing you or you think that might happen or are you just want it to where? You can just truthfully say to somebody: I don’t own that company.
34:57
All you do is measure articles with the State, like if it’s New Mexico it’s like $50.
35:02
You fill out a form and you add let’s say you add a PMA, so make up a name, PMA describe the group that we’re talking about here, and by the way, when we do this, we’re not giving the group any rights over your company because they they they’re not going to act cohesively.
35:18
Then I’m gonna tell you why in a second.
35:20
So you would amend the Articles to add the PMA, then you would remove yourself, and then restate the new owner. That’s how I do it. And I can give you guys an example of how to amend the articles.
35:29
I can do a video on that, OK, And you’re done, OK. Amend the Articles Add the PMA.
35:35
All right.
35:35
Now when you act in behalf of the PMA, even though you don’t say it, you’re in fact its trustee.
35:43
So if I if I talk to somebody let’s say I’m making a vacation plans and I call up a resort and I’m saying, Yeah, I’m making reservations for my family and I give them the names and all this stuff, I’m acting on behalf of my family.
35:56
So technically, I’m the trustee, they’re the beneficiary, right?
36:01
That’s kind of how it works.
36:02
So, we don’t want to talk too much about that. But if you look at my banking abstract, if you go back there and see, you’ll, you’ll see in there right?
36:07
did identify the signer the authorized signatory as the trustee.
36:12
And I didn’t want to do that in the beginning, but I found that it was OK after a while, so I didn’t want the bank to get hung up on that, and so far they haven’t.
36:19
And that is the reality. But I would avoid using that language too much.
36:23
Does that simplify it a little bit?
36:26
Yeah. And if you could, make that video as far as like, actually going in, and just kinda do a blank OK here. Because you set mine up. Their New Mexico, so that would be OK, great, yeah. Yeah. But But, If you, If you do that, you need to do anything with the bank account that you have, open, at, the bank, as far, as, Do you need to give them the amended article, or do they may not need, or I know you said before, it’s their responsibility to keep up with that. Is that correct, it is true.
36:55
But if you want to account for human error and prevent it, because it’s a mess, and it’s expensive to fix it, even though they’re wrong.
37:02
So, yeah.
37:04
Technically, it’s good to just say, give them a notice. So you would In fact, I wouldn’t send it to my Branch.
37:09
I would look in my terms of service and look for the written communications, like Dispute Adress, or whatever, and I would send it by mail first class mail. And I would just give them a copy of the amended articles to the account holder.
37:22
That’s how you would talk about it.
37:23
Please be advised the account holder, whatever the name is, Has amended its articles to the following, and you might open a can of worms, I don’t know.
37:32
But yeah, that is the correct way to do it.
37:36
OK, well, if if, like I said, if you could make a video and include all that, we can refer back to it and then kinda do it along with the video. Be able to pause and whatnot.
37:44
That would, that would be greatly appreciated. Sorry, guys, I’ll, I’ll shut up now, Thank you. OK, Mathy, I’ll make another comment and I think was, it was a kid that was going to ask me something correct me if I’m wrong, but on the PMA. If you want me to expand it out more, build it out, let’s call it, I can do that. So what I would do is I would have an interview with you and I would ask you what your intent is. What are you trying to do with this asset? And I would help you write the articles, I would develop the articles. And we’ve come up with like maybe a 2 or 3 page document.
38:16
Real, a real, short one, OK? Now I’ll explain why all that works and all that. So so if you’ve got one of those entities like that with a PMA, there’s a lot more you can build out into it.
38:25
I just don’t like to give you a document because then I’m just telling you what to do, and I want you to, like, understand it over time. It does take awhile.
38:34
All right, there’s someone who did Kennedy. When asked me something I thought you were.
38:38
Yeah, John.
38:40
Yeah, so the owners of the account that I’m opening would be, I sell And the LLC Correct, the owner of the account is the account holder. Period.
38:56
The calendar. Yeah, the bank account owner is the account holder, whoever’s named as the account holder.
39:03
OK, well, I thought it was I was 26% an entity, other, OK, that’s the owner of the entity.
39:12
So who is the account holder? It’s an LLC. OK, that’s the ownership of the LLC, is different.
39:18
But if the LLC is the account holder, that is the owner of the account.
39:25
OK, so I just should put the LLC. See, I’m getting confused.
39:29
When I’m opening this account and throwing a monkey wrench, everything in there I don’t know what to do you know, they’re asking me all these questions.
39:38
So, I’m just the seiner, that’s a bad.
39:43
usually, if it says in your documents, Yeah.
39:47
And the account holder, is the LLC.
39:50
Yes.
39:52
So, that’s all I need to mention. I don’t need nothing about it. You don’t know, you don’t. And the banking abstract documents covers all of that. And, again, it’s not material to opening the account. And, yeah, they do ask you about it. But just remind them. The PM is not the account holder. I’m the signer for the account holder that owns the account. That’s the LLC.
40:14
OK, I never gave them a banking apps script. So didn’t ask for that either.
40:18
Yes, that might help, and you know, a lot of times, they give you a form to fill out, or a series of forms and all it does is regurgitate the same information that I gave you and all your documents. And then they don’t read my documents.
40:29
So sure, you can fill out the bank documents, but it’s redundant.
40:32
Make sure they see those, those PDF documents, that’s going to help you? Do you have them? I do, I didn’t even give them time.
40:40
No, I never got.
40:42
Well, OK.
40:43
Shoot me an e-mail and I’ll look for it, If you don’t mind, Shoot me an e-mail and I will look. I’ll look for it.
40:51
All right. I think I have to make your life easier.
40:55
I send them out, but anyways, yeah, I’ll just, I’ll make sure you have the latest and the greatest.
41:01
Yeah.
41:02
Alright, sure thing.
41:04
I know this was not very exciting. So, but it is this clear plot, are some few things, some important things.
41:09
Anybody, anybody have any questions that I miss anything?
41:15
All right, and I’m probably going to do a series of these types of videos.
41:20
There is one I wanted to cover, which has to do with a stock transfer agreement for transferring stock before a sale of the stock, like a private equity deal so that you don’t have the Capital gains tax.
41:32
It’s not that complicated, so that’s another dry one, but I think that that’ll answer a lot of questions on how to convey an asset using the LLC to legally avoid attacks consequences.
41:43
Anyways, that’s next. Probably.
41:46
Or anything else?
41:48
Alright, appreciate everyone joining. Anyway, John? Yes.
41:53
Matthew, again, hey, I had a kind of unrelated quick question, if you don’t mind.
41:59
I have some, I guess, friends where you want to call them, that are kinda trying to be entrepreneurs and trying to help people in the crypto space.
42:08
As far as you know, helping them.
42:10
Not so much set up accounts but like you know OK, you know Coinbase is where you can get some of the big ones and this is how you set up a wallet and stuff like that and.
42:18
They’ve been having some trouble as far as getting insurance and I don’t remember the name of it, but it’s basically you know if if somebody were to try to sue you and say that you’re giving them financial advice.
42:32
Because you said you know something. Something that they felt that you told them you need to go invest in ripple or something because it’s going thousand dollar point or something.
42:42
OK, so, you know, that, and I said, You know, I said, You know, you might be able to do different things through LLCs to kinda get your like an arm’s length away from, from any of that, but I couldn’t explain it quite, OK, where they felt comfortable.
42:56
And so, I was wondering if, is that true or you know, of, you know, what do you, can you convey, basically, kind of what you do to protect yourself, that somebody has to have an insurance policy If somebody or what yours, because I avoid insurance. I avoid insurance. I avoid paying, because I can get insurance and indemnification in the contract, and it’s like you described. I’ll give you a short scenario. Maybe this will match up with what you’re saying.
43:20
I talked to a woman about two months ago, and she had a She had an attorney setup an LLC for her website, and she was doing consulting.
43:29
It was somebody like that. Yeah. She was doing professional consulting, and she was a scientist. So, it was, it was in that area. And so the attorney said, Get a million dollar policy. In case you get sued. Which is how attorneys think. It’s ridiculous. All that does is invite someone to sue you. So, I said, Well, what’s the what’s the risk? Because she goes, Well, first, identify the risk. Let’s describe what the risk is.
43:53
Her risk was that maybe her customer might sue because her advice was wrong.
43:59
So, you mitigate that risk by contract, first of all.
44:02
So the contract describes what you’ll do and not do, and there’s some things, like, for example, you can say, I’m gonna give this information to you on a best effort basis.
44:11
Now, some people are giving actual investment advice and they’re supposed to do that. Like they’re permitted or whatever. And so, yeah, there might be some liability there, but you want to limit the liability in the contract and you say, look, if you’re going to be an investor, you have to put your big boy pants on.
44:26
I’m only going to be willing to be liable up to $100 or your principal or some you know some version, So, you just narrow it down to just almost nothing, OK?
44:34
So, you do it like that, and then you can even have the contract.
44:39
I’m not, I’m speaking out of school here because I don’t know exactly how you set up, but what I’ve told this lady is, Why not just have a contract with a company that provides that service that just sits out over here, OK?
44:52
Because what you don’t want to have happen is your company, your core company being sued and have that company name being put in the public records and all the all the public things that happen after that, all the discovery. And all this stuff gets up in the public records. And you don’t want all your vendors looking at you and going, hey, we don’t we don’t know if you’re a good company anymore, right? It just drags you into the mud, So to speak.
45:11
So, what I suggest is you, you export the liability with, like you said, an LLC and have that company. Provide the best service to all your customers and do all the consulting in that company name. Here’s how that works.
45:24
When the customer or the client pays the company, he’s paying this company over here and not your core company.
45:30
That’s what creates the obligation over there, and all that is over. There is a piece of paper, so I don’t need insurance for that. I don’t care about that company. I could shut that down and start up a new one.
45:40
What I care about is my brand, so separate your payment processor and your your risk and your contracts that have the risk from your brand, right, You can do that with an LLC and the contract.
45:55
That said, help match up what you’re.
45:58
If I know more about your details I could probably No Occupy, write it for if you want me to.
46:03
Well, it’s, like I said, it’s basically a group of entrepreneurs. We got together and we just basically, we have a Zoom call every other Sunday night and we just talk about stuff like that and we talk about website design. You know, people that can help with websites and we talk about you know branding and how to get, you know, things, OK branded as far as going on there. So nobody can steal your brand and trademarked and stuff and all that stuff. So you know, when people were bringing that up, it made me think of you like, man, I wish John was here because I know he could probably talk to them and explain it. So, I’ll go back, and whenever you post this video, I’ll, I’ll listen to it again and then share it with all of them. And hopefully they can watch it. And hopefully, maybe the next Zoom call, we can have some more questions, and then I’ll relay them to your your telegram. So, they have the link for, for these calls on, on Thursday, you’ve got Maybe they get in and ask them, because everyone’s doing a little bit different. Some people are doing consulting, some people are doing more.
47:04
Like I said, I don’t know. Everyone’s doing a little bit different. I’m more in the kind of the windfall the asset protection. That’s why I try to get on these calls when I can, because you know it. I don’t want a scenario where there’s a lot of people getting into this, and they wake up, and, you know, one more that I got seven figures in their bank account, like, oh my God, I don’t know what to do with it. And we have the scenario where people win the lottery 3, 4 years later. They’re broke, I want them to know how to structure and protect their wealth. And that’s what I’m trying to do, And trying to figure out as many different ways I can, because one size doesn’t fit all, wanna be when it comes to that. So, I want to be able to give people options, and, and be able to explain to them, you know, Hey, this is things you can do, they’re not real hard. They’re not real fancy. But, they get the job done. And, you know, if you do the simple things now, and set yourself up, then you can leave things to your kids and not have to worry about it.
47:52
So, So, anyway. So, we’re doing some of the things I have, a lot of stress is, where I help people with branding and how to protect the brand.
48:00
And also, I like, you’re saying, how to manage that risk and re-allocate. You know, once you, once you acquire some sort of windfall or get some cash flow from a project, you want to re-allocate somewhere. And, and that’s a big thing. Because, right now, we’re, our whole economy is changing. So, there’s, there’s some categories of assets you want to consider getting into. So, we can certainly talk about that, and it’d be fun to do.
48:23
I can be on your call if you guys want me to, It’d be because I can participate in that as well.
48:28
I can speak.
48:29
Yeah, I mean, I, I know that you are.
48:32
Maybe we can set it up.
48:34
I don’t know what’s best to reach you. We do it. Like I said, we will do it this Sunday. And then I think we already have a topic for this Sunday, But, I mean, if you are willing to get. on it, it’s eight o’clock central, so B nine o’clock, suddenly not your time. They usually go about them.
48:50
Hour to hour and a half. But I mean, you can just get on and do your deal and, you know, have some questions. And then you get off, because I mean, I wouldn’t want anybody staying up. So, you know 11 o’clock at night, but What would be the best way to reach out to you to maybe try to set that up because I’m sure we all may have.
49:07
Yeah, at the proton mail, you e-mail me and just put something in the subject line.
49:13
You know, put a note about this scheduling a call, group call?
49:18
Yeah, OK, thanks, that’s good. I appreciate your notes. Gosh, that’s good, because I always want to know what. I forget, things, you know, I forget. OK, there’s a whole category of things you guys want to know about, and I can go into some more detail. Now, somebody’s asked me a couple of things.
49:30
Yeah, I can, I can download.
49:34
But, oh, this abstract, OK, So, yeah, OK, you guys want to see this abstract, OK?
49:41
I will make it available, I’m not sure how I’m gonna do that yet. I think I can do that through the YouTube. I’m not sure yet. But anyways, can I’ll do that. And then you want to ask me about?
49:54
Setting up entities in Ontario.
49:55
OK, so, if you’re in Canada, what I, what I normally do, is this, we do it.
50:01
We do a company here in the states and then we get all that setup, usually use Caleb and Brown this for Kryptos, and then we domesticate it in Canada. Now, I used to start setting up a partnership there, and that’s too complicated, my opinion.
50:14
What we’re doing is ending up with a holding company in Canada, The way we’re doing it, is using a limited liability company that we already set up in New Mexico. For example, we just domesticated in Canada.
50:24
So in Ontario, you would just domesticated in that province and it would be filed as an extra provincial company OK. And it’s not a hard process. It’s just, you know, filling out a few forms and they’ll want to see the articles OK on file, here and in the states.
50:45
And, yeah, OK. So, you’re mentioning the limited liability partnership. That’s how I was doing it in the beginning.
50:50
Now, um, over the last several years, I’ve learned that other countries easily recognize holding companies.
50:59
And a lot of them are called private, limited liability companies and they’re called limited companies, LTVs, LLCs, things like that. And you can actually register those in. Like, for example, the Republic of Ireland, India.
51:14
I believe.
51:14
The United Kingdom, Germany, I think, but the German one is the GMBH is what they’re called. Don’t ask me to pronounce what that means. What that stands for. Please. So right now what I’m suggesting is use one of those types of companies. If you’re in Canada, the easiest way seems to be take an LLC in the States and domesticated there.
51:33
If you domesticated or if you form a holding company in Canada From from the start there I think it might be a bit more complicated. In that case. It’s not a problem.
51:45
I mean I don’t want to get the research on how to do that because you need all kinds of different kinds of documents. And for that, I would just use a local service to do that. I would just recommend not paying several thousand dollars.
51:56
So, is that, does that help?
51:59
Um, let me know.
52:03
OK.
52:06
Yeah, great questions, I appreciate that. I don’t miss anybody just looking at my notes here.
52:13
Yeah, abstract, alright.
52:15
So, yeah, I will take this abstract, and can, I know you’re going to send me an e-mail, so I will just shoot it off to you right away, But I will, I will make this available and I will make it available, in the members area, too. So most of these videos are going into the ultimate membership area on privacy, … dot IO to say no.
52:34
John, Jay can ask you a quick question about the Canadian example. Yeah.
52:38
OK, so, I’ve got family in Canada, but right now, I am managing their crypto for them. And I, and I have an LLC through your support, and so I know how to take it out through my LLC and all of that, but I’ve suggested to them that when it’s time for them to take out their crypto, via me, that I would send them their crypto. And then they, they, In Canada, they do what you’re suggesting, then they can take, you know, they can take it out, so that works, right? Like that process and still work, they would just dove, right? That’s the proper way in my opinion, are doing it. Yes.
53:15
Yeah, let them handle it.
53:17
Right, because if I took it out through my LLC situation, getting it to them is still an issue, like in dollars, Right.
53:24
Right. You’re doing a big favor for them, and just keep in mind, don’t, don’t let anybody know. third parties know that you’re handling other people’s money, even though their friends and family. Because all of a sudden, all this licensing comes in, and they’ll just be a hard time. So, yeah. Yeah. Sounds good. Thank you.
53:40
All right. Well, thanks so much, y’all. And hopefully, I will come up with this content.
53:44
Appreciate that I’ll start making some notes With that said, I’m going to end it. Have a good night.