October 21, 2025 • 54 mins
Is your business structure setting you up for failure? Rondi Lambeth breaks down the essential role of corporate structure in business success, revealing how it can protect you from lawsuits and minimize your tax burden. He explains the various types of structures (sole proprietorships, LLCs, S-Corps, C-Corps) and their pros and cons, emphasizing that 92% of businesses fail within 10 years due to poor structuring. He unveils the "fortress structure" – a combination of entities designed to maximize asset protection and minimize income tax, drawing inspiration from Fortune 500 companies and the wealthy elite. Rondi also discusses the importance of understanding the Uniform Commercial Code (UCC) and the need to go beyond basic LLC setups to achieve true asset protection, particularly in states outside of Texas.Learn More:
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Episode Transcript
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(00:00):
76% of Americans live paycheck to paycheck and according to
Forbes, 93% of business owners pay more than legally required
to pay an income tax. And nearly 50% of all Americans
have bad credit, but not you, atleast not anymore.
See, this is the school of wealth where you learn how to
(00:21):
maximize your credit, minimize your taxes, and multiply your
assets so you can create generational wealth.
Hi, I'm Romney Lambert, certified FICO credit
professional, author, speaker and tax strategist.
For the last 20 years, I've helped 10s of thousands of
Americans just like you take control of their money, fix
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their credit, wipe out their debt, cut their taxes by 50% and
multiply their assets. If you're ready to break free
from the rat race and start building a life of freedom and
abundance, then you're in the right place.
Welcome to the School of Wealth.Hello and welcome to the show.
(01:03):
Today we're going to talk about the one thing that will
determine whether you stay in business or not.
See, 80% of business owners willfail within the first five years
of opening the business and thenit's 92% of businesses will fail
within the 1st 10 years. So there is essentially a 92%
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chance or higher that if you started a Business Today, in the
next 10 years you'll be out of business.
And the one thing that determines this more than any
other item is structure and how your business is structured.
And today I'm going to teach youhow to structure your business
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in a way that will protect you from frivolous lawsuits, but
it'll also limit how much you pay in personal income tax,
potentially taking you to a 0 percent tax bracket.
Now, I've paid very little income taxes my entire life.
In fact, last year I paid $316.00.
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That's it. Not 316,000 dollars, $316.00.
And that $316.00 that I owed taxes was not even income tax,
it was self-employment tax. See I referred someone to a
insurance agent and because I also have a life insurance
license I received a Commission and it was approximately $2000
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and self-employment tax on that Commission was owed for a total
of $316.00. So I paid no state income tax
last year I paid no federal income tax and the only
self-employment tax that I paid was on $316.00.
Now if you looked at the top line of my tax return, you would
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expect to have seen me pay 7 figures in taxes.
And if I was using a typical CPAlike most business owners do, I
would have paid 7 figures. But because of the structure
that I have my businesses in, the businesses that I manage,
that I can control, but I don't own them anymore.
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See, I don't own anything. I don't own a house.
I don't own a car, I don't own an airplane, I don't own
apartment complexes, I don't ownany businesses.
And I guess that's not 100% truethat I don't own anything,
because I actually do. I own this jacket, I own this
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aura ring that I have on, and I own this new Apple Watch that I
got yesterday, but I don't own this phone.
This phone is not mine. Technically, I guess I own this
coffee cup that's got some cold brew in it.
But this microphone in front of me, I don't own this.
I don't own the boomstick. I don't own the cord.
(04:01):
I don't own the camera. I don't own the screens in front
of me, the green screen behind me, the desk in front of me, or
the computer that this is recording on or the house that
I'm sitting in in my studio. I don't own any of it, but I can
control all of it. See, I truly live the lifestyle
of own nothing, control everything.
(04:26):
So what I'm getting ready to go over today on today's podcast is
something that I have been doingfor years.
I've been in the tax game for decades.
This is not some new thing for me.
It's just new for me to present it to the public now.
I presented it over the last 20 years with my financial
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education company, but not at this level.
And now I'm offering to the public the service that I've
been do or the structure that I've been doing for decades, the
structures that my friends have been doing for decades,
Thousands of individuals that I know through my friends and
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other acquaintances, we all do the same structure.
None of us have ever been audited.
In fact, it's the same type of structure that every single
Fortune 500 company does. It's how Hollywood manages all
of their money and their structures.
It's how the music industry manages their assets, their
entities, their structures, and their money.
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It's how the wealthy are able toown nothing, control everything,
and pay little to no income tax.And I'm going to share that with
you today. So let's get into it.
All right, So the first thing wegot to talk about is structure.
What is a structure? Now, when I'm talking about
structures, I'm talking about LLC's, sole proprietorships,
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partnerships, S corporations andC corporations, and limited
liability partnerships. So all of those fall into what I
call a structure, and all of those are regulated by the
Uniform Commercial Code, UCC. So UCC is the second most
powerful law in the land, only second to the Constitution.
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The Constitution is the most powerful law in America and you
could argue in the world. Everything here in America runs
under the Constitution. And you hear this.
It's our constitutional right tohave freedom of speech.
It's our constitutional right tobe able to protect ourselves and
bear arms. It's our constitutional right to
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not have someone just come into our house illegally there.
So there's all of these constitutional rights.
That is the number one law you could argue in the world #2 is a
Uniform Commercial Code UCC. And the UCC is what regulates
what you and I do in commerce. That what's what regulates the
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banks. It's what regulates really the
States and how they manage LLCS and sole proprietorships and
partnerships and C Corps and S Corps, etcetera.
So that's corporate law. So when I talk about structures,
I'm talking about LLCS, C corps,S Corps, partnerships, etcetera.
(07:19):
So in business, generally the way it works is we get started,
we have an idea and outside of if, if it's a tech company or a
Ponzi scheme, you generally don't go to your family and
raise a bunch of money. Generally the only time you need
to do that is if it is a Ponzi scheme, you have no experience
of doing business or it's a startup.
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Most people don't need to go raise millions of dollars to
start a business. They have an idea, they launched
the idea, they bring in money, they reinvest the money back
into their business. That's how most businesses get
going. So it's called bootstrapping.
So usually we start out and we can do start out as a sole
proprietor. Now a sole proprietor is you
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just go and say this is my business.
You go into the bank and you say, hey, I want to start a
business. I want to open a bank account.
And they're like, oh, OK, what'sthe name of your business?
And we're going to call it Randy's Coffee Mugs, just to
make things simple. Randy's Coffee mugs.
And they're like, oh, what's your business?
Why make coffee mugs? Oh, cool.
Have you incorporated yet? Oh, no, Nope, I'm just getting
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started. Oh, so you're going to open a
sole proprietor business account?
Yeah, I guess so. So then the bank set you up with
a bank account as a sole proprietor.
And I do that in quotes because essentially it's just you.
You're the sole member of this group, the sole, SOLE member or
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SOUL of the LL of the entity. It's not an LLC yet.
So you're a sole proprietor, which means it's just you.
You're doing business as you have ADBA filed.
Now, some states require that you file your DBA with the
state. You file for a sole
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proprietorship name, and then you pay the state a licensing
fee, and depending on the state you're in, you might have to pay
some other types of fees. Some states don't require that
at all, and you need to look it up on whether or not the state
requires it, because if the state doesn't require it, you
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don't have to register anything with the state.
You simply go down to the bank, you open up your sole proprietor
business account, and then when you you just manage everything
separately, you put the business, the business deposits
into the business account. You hopefully you're not
commingling your funds and you keep everything separate.
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That's the proper way to do it. Unfortunately, many people
commingle and here's the the truth, it doesn't really matter.
It doesn't matter as far as the asset protection side of it
'cause either way you're screwedif you get sued as a sole
proprietor. There is no separation.
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Where it does matter is in your taxes.
Now, if you keep track of it andyou separate it and you have one
spreadsheet for personal expenses and one spreadsheet for
business expenses, it's not the proper way to do it.
Will you go to jail over it if you get audited?
No. Is it going to raise some
eyebrows at the with the IRS, with your auditor?
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Yes. Will you potentially lose some
of the deductions that were legitimate deductions?
Probably because you're commingling and the IRS wants to
see it separate. So do yourself a favor and open
up a separate bank account for your business and only run money
through that business that's associated with the company.
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OK, so that's a sole proprietorship.
Now, when you go to file your tax return, you're still going
to file a regular tax return, except for this time you're
going to have it what's called aSchedule C.
So you'll have your personal taxreturn and then you'll attach a
schedule to it. And that Schedule C is your sole
proprietorship business. So that's the first step or the
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first type of structure when it comes to business.
Now you might get ACPA or a tax professional and they're like,
hey, you should incorporate or you should do an LLC to protect
yourselves. And I did that in air quotes.
If you're listening, if you're watching, you saw it, but
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they'll they'll convince you to do an LLC.
Now here's the truth. There's not much advantage of
doing an LLC over sole proprietorship for asset
protection. Not really.
And there's not a big benefit with taxes either, because LLCS
don't save you any money in taxes. 0 None.
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Nada. Not one penny will you save as
an LLC versus a sole proprietorship.
In fact, I would argue that S elected LLCS, S corporations
also will not save you one pennyin income tax.
In fact, they'll probably cost you more to run it as an S
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elected LLC or an S Corp. You'll pay more.
Many times you'll pay more in taxes than you would run pay if
it was just a sole prop or an LLC.
So why would you do an LLC if itdoesn't save you any money on
taxes? What's the whole purpose of it?
It's asset protection. Unfortunately, most people
though start the LLC, but they never finish it the proper way.
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And I'll get into that. So we have our sole
proprietorships. We're done with that.
We'll put a pin in it. Everybody, I think by now knows
what a sole proprietor is. So what's a limited liability
company? An LLC?
Well, LLCS were created not too long ago and it was by the state
of Wyoming, State of Wyoming. Wyoming is a very progressive,
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forward thinking state. In fact, women were allowed to
vote in Wyoming 50 years before they could vote anywhere else in
America. That's right, Wyoming in their
constitution say that women had a right to vote before the
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federal government even gave them a right to vote so they
could vote on local things similar to illegal aliens.
See, there are some cities, somecounties and some states that
allow illegals, people who have invaded our country illegally
that could be technically terrorists, could be rapists,
could be a murderer. There are some states, cities
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and counties that allow these criminals, these illegals to
vote. They also let them sit on City
Council. Some states even are trying to
allow them to serve in state politics.
So I digress a little bit. So the state of Wyoming though,
was the first state to allow women to vote 50 years before
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they also created the limited liability company, the LLC.
And now all the rest of the states have kind of followed
Wyoming's leadership and createdLLCS for themselves.
So an LLC, like I said, stands for limited liability company.
And it's kind of like what it sounds like a limited liability
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company. Now you could have pretty much
as many members as you want in your limited liability company
or LLCLLCS can be owned and controlled by other entities.
They could be owned by AC Corp, they could be owned by an S
Corp. They could be owned by another
LLC. They can be owned and managed by
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individuals. They can even be owned and
managed by non citizens of America.
So you could live in Canada and own an LLC in America or you
could live in Mexico and own an LLC in America.
And when I was in Mexico a few weeks ago at a speaker training,
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I met with several people that were not from America.
One was from I1, was from Philippines, There was somebody
from Japan there, Brazil, El Salvador, Venezuela, Puerto Rico
and Canada. All of them had LLCS.
In America, LLCS don't pay taxes, so the taxes due go to
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the owners. And so that it gets a little bit
more complicated than what what I want to talk about today, but
just know LLCS are limited liability companies, but in all
50 states except for one. So in all of the nation except
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for one state does not recognizesingle member LLCS, dual member
LLCS, if it's husband, wife, they only recognize LLCS that
have three members or more that are not part of the immediate
family. So if it's you, your wife and
your daughter or you, your husband and your son, 49 of the
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50 states is not going to recognize that as an LLC and
they're going to treat it as a sole proprietorship.
Let me repeat that because I want to make sure you heard
that. 49 of the 50 states currently, as of September 2025,
do not recognize LLCS as LLCS. If it's sole members or
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controlled by family members, they don't recognize it.
So what does that mean? That means that if your LLC gets
sued, there is no limited liability protection.
If you get sued, there is no separation between you and the
LLC. So if you have a rental property
and your rental properties inside the LLC and someone slips
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and falls and breaks some bones,they're going to sue the LLC.
And unless you live in Texas andthe real estate is in Texas
because Texas is the only state that recognizes LLCS, they're
going to sue you as well. The owners on the other side,
you're an owner of a real estateproperty or a business that's
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inside the LLC and you personally get in a car
accident, whether it's your fault or not, and they sue you.
They are going to go after all of your assets inside your LLCS
and there's no protection unlessyou live in Texas.
So unless you live in Texas, if you have an LLC and you're the
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100% owner or it's you and your wife or you and your wife and a
sibling, just know that if you ever get sued, there is no asset
protection with that LLC. There's no tax benefit ever with
LLCS and there's no asset protection.
There is no limited liability itwhen it goes to court the judge
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will sought the will rule against you, the LLC and the
owner. Do you have collections, charge
offs, even repos on your credit report?
Let me tell you what not to do. Don't ignore it and don't
overpay it. See, most people either panic or
they pay full price, or they bury their head in the sand and
let their credit rot until they get sued.
(18:57):
At Fortress, we help you restructure your debt, settle it
for a fraction of what you owe. And because of the way we
negotiate with the banks and thecollection companies, we often
can get it removed from your credit report as well.
Now, a lot of the time, the creditor will agree to delete it
upfront. This isn't a trick, it's a
(19:18):
strategy. So click the link in the bio to
learn more or go to fortressu.com.
So why would you put anything inan LLC?
Why would you go through the headache the fees pay for the
extra tax return? Because when it goes into an
LLC, it's now a separate tax return.
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So it's going to be a 1065 as a partnership unless you have it
taxed as an S selected LLC, which we'll talk about later,
which would be 1120 S form. So why would you even do the
LLC? Well, you would do it for asset
protection, but here's what you need to know in order to get the
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asset protection that you are seeking with an LLC.
You can't be the only member, You and your family can't be the
only members. And so the proper way to do it
is you have ownership in it. Maybe your spouse has ownership,
which I don't like seeing. I like to see maybe a child or
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an adult child that doesn't livewith you.
And then the third owner is another Wyoming LLC.
It's a holding company. It's a Wyoming LLC that owns 98%
of your state LLC, the one that's doing business with the
world, the operating LLC. I call it the pawn, as in the
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chess pieces. The ponds have a very important
role in the game of chess, but many times they're disposable.
And that's how you want to set up your working LLCS, because
you want them to be disposable. No assets, no large sums of
money in the bank accounts. They're just, they're, they're
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the face of the business, if youwill.
But there's nothing behind it. There's no assets in it and I'll
explain a little bit later why you want to do it that way.
So if you want to properly set up your your LLCS for the
maximum amount of asset protection, you cannot be the
sole owner of the LLC. There needs to be other partners
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involved. And once you hit three members
or more is when the asset protection kicks in.
So if it's you and your wife andanother person, but it wasn't
3333 and 33, it's you have 1%, your wife has 1% and the other
person has 98. Now you get limited liability
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coverage and protection. Or if it's you, your wife and an
LLC and the LLC and additional LLC is a member, then you would
get the limited liability protection.
So you might be thinking, well, what good is that?
If I have an LLC and I'm not theowner, like how do I benefit
from that? Why would I be trying to build
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this big business? Well, you might not be the
owner, but you would be the manager.
So you can control everything. So who's really the owner of
this LLC? Well, it's another LLC that you
manage and control. See if you have a holding
company that's in Wyoming and itowns 98% of your state LLC, your
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operating LLC, and that operating LLC gets sued.
You can stand in front of a judge and say, your honor, I
don't own it. I don't even get paid in this
LLC. Who owns it?
Well, if you put it in your operating agreement in your
minutes that you have a non disclosure agreement like I do
for my, my companies and my clients, I have a very, very
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detailed, very strict non disclosure agreement that says
that I, as a member of this LLC,I'm not legally allowed to share
with anyone outside this LLC who's involved with the LLC
under no circumstances, especially if I get sued.
And that will hold up in court. In fact, it held up in Supreme
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Court last year in July 2024. So the non disclosure agreement
is extremely essential to have it in your minutes or your
operating agreement or your bylaws of your corporations.
So that way if you ever get suedin a company that you manage but
don't own, you don't have to tell the courts who the owner
is. And if the courts really want to
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know, they'd have to go to Wyoming and convince a federal
judge to have the state of Wyoming tell them who's in that
company. And that's not going to happen.
Wyoming is never going to release that if there is a
reason. Wyoming is a non reporting
state. See, Wyoming's the only state in
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all 50 states that's non reporting, non taxed, and no
charging order. And I'll get into charging order
later. So non reporting means they
won't tell anyone who's inside those LLCS without a federal
warrant. So if you're just some ambulance
chaser, frivolous lawsuit file or a new file lawsuit against my
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LLC and it's in Wyoming, guess what?
You're never going to know who'sinside that LLC ever.
And I don't have to report. I don't have to tell you because
of the non disclosure agreement.So it's really important you
have the non disclosure agreements in your minutes or
your operating agreement or yourbylaws.
So that's a limited liability company.
You can have 1000 members in there if you want.
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It can be member managed, which means the members of the LLC
manage it, which means all of the members get to vote and have
a say. It can be manager managed, which
means some of the members may get a right to vote and some may
not get a right to vote. So let me break down what that
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means. Manager managed, member managed.
I had a gentleman yesterday thatI did a consult with that is
buying a $38 million resort, andhe called me to get some advice
on how to structure that. And I informed him that in order
to raise money, because he's going to raise $15 million for
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the down payment, use that down payment for the bank.
And then him and a few other partners are going to own this
property. And I said, well, in order to do
this, you're going to have to register it with the SEC because
you're raising money. And he's like, why would I have
to do that? I said, because it's going to be
a manager managed LLC, which means the managers get to decide
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what they do with the money. The managers get to decide what
color the buildings will be painted.
The managers get to decide who they hire, who they fire, how
much they pay. The managers decide these
things, not the members. See, he had raised money in the
past with his LLCS for small businesses, but those were
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member managed LLCS, which meantif you put 100,000 in, you have
$100,000 of the shares and you have $100,000 worth of voting
rights. Those are member managed LLCS.
But when you go into the apartment complex world or the
commercial world or the resort world or these big companies,
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you want to have a manager managed.
Because if you have 1000 different investors and you want
to go and change the color of the building, you would have to
get approval from the majority of those members, if not all of
them. That's a member managed LLC,
which are not what you want. You want a manager managed LLC
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and you can have two managers and 998 members, and those two
managers control that entire LLCand the 998 other members have
no control. And so when you set up these
LLC's, that's how you want to have it is you're a manager.
The LLC that you also manage is a manager, and then the third
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person is just a member and theyhave no voting rights.
And so now if you manage the LLCthat owns 98% of the LLC and
you're the manager, guess who controls the management of the
LLC? You do, but you don't own it.
So now you can stand in front ofthe judge with your right hand
up, your left hand on the Bible and solemnly swear that I don't
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own anything. I don't own the LLC.
And you're following the law because you don't.
You manage it. And because of the non
disclosure agreement, you can't tell them who's the other owner.
And there's literally just aboutnothing they can do to force
you. Now, if it's a fraud case and
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the federal government's involved and you you're running
a Tai Lopez $115 million Ponzi scheme, well, that's probably
not going to protect you much because the federal government
will get the warrant. I'm talking about ambulance
chasers. I'm talking about frivolous
lawsuits. I'm talking about civil
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lawsuits, not fraud. Prod is completely different.
OK, so that's an LLC. Now what's the advantage of the
LLC? If properly set up with three
members and run through a state like Wyoming, there's great
asset protection. In fact, because Wyoming is a
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non charging state, if you get sued, the LLC gets sued, the
Wyoming LLC gets sued, and you lose, Then the plaintiff who won
could technically get a judgement against you against
the company, and then file that judgement with the Secretary of
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State. And now there's a lien filed
against your pawn. Pawn.
Like a pawn in the chess game. They file a lien against your
pawn LLC. Well here's the thing.
Wyoming's a non charging state, which means the courts cannot
take charge of your LLC. They can't force you to sell any
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assets, they can't interfere with any contracts.
They can't access funds in your LL in your bank account.
They can't levy it. They can't take charge of your
LLC because it's a non charging state.
So that means that if the company gets sued and you lose,
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you don't have to pay the creditor.
That judgement will just get filed against your company and
life goes on. Now, if you don't have it set up
properly and that's your only entity and you don't have a
series of other LLCS, then you might be in trouble because you
can't build business, you can't get funding anymore under that
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business. You might not be open a new bank
account. The bank might find out about
the lien and then close your bank account.
So we could create major problems for you if it's your
only company. But if you set it up properly
where it's the disposable company, then who cares?
You're not building business credit under that company
anyway. You're not getting funding.
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It has no assets and if the bankcloses it, big deal.
Go open a new bank account, samecompany.
There's nothing they can do to take that money from you because
it's non charging. This is why attorneys generally
do not sue Wyoming based LLCS because the attorney knows
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they're most likely never going to receive any funds ever.
So it doesn't lawsuit proof you to use a Wyoming multi member
LLC with a non disclosure agreement and buy sell agreement
and many other things in your minutes and operating agreement.
That doesn't prevent 100% of lawsuits.
It just makes it so you never have to pay.
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I had a client recently call me and he was freaking out because
he just got served for a class action lawsuit for accidentally
sending a text message to someone before 9:00 AM.
Come to find out the person thathe texted was a Florida resident
that was vacationing in Hawaii. So there's a four or five
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there's, I think it's five hoursdifferent time zone.
No, I think it's 7 hours. I think it's 7 hours different.
And so when he sent out the textmessage at 9:00 in Florida where
the person lives, where they registered their phone number
with the area code, they were actually in Hawaii.
And so they received it in the middle of the night or the early
AM, which violated some federal laws.
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And you know, he can get out of that.
He could fight that, go to courtand pay $250,000 in attorney
fees to fight this frivolous lawsuit.
Or he can simply give him the finger and reply back with, I'm
not going to pay you. I'll see you in court and then
don't even show up to court. Why even spend any money on it
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at all? Because it's a he's got a
Wyoming based LLC that has no assets.
It is a pawn LLC. It is disposable.
So if they sue it and he loses, which he will cause he's not
even a bother going to court. Why bother fighting this thing?
They're going to get a lien against his LLC that has no
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assets in it, no money and they're going to fight.
They're going to spend 10s of thousands of dollars trying to
get him in court and do all thisstuff.
And when it's all said and done,they're just going to get a lien
against a company that has no assets and they're going to get
nothing. Now, he also was concerned
because they named him in the lawsuit because that's how it
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works. Remember, I said unless you live
in Texas and you did everything right, there is no separation
with LLCS or sole member S corpse or sole member C corpse.
And so they named him in the lawsuit as well.
And I said, oh, that's easy, file a motion to dismiss.
So you're going to either do this yourself or do have it with
your attorney, file a motion dismiss because you're not the
(33:36):
owner of the company. They just assume you were the
owner and you have to inform them that you're not the owner.
So you're going to file a motionto dismiss, do the fact that
you're not the owner of the LLC.In fact, you're the manager and
you don't even get paid. And so the courts will be
required and forced essentially to remove him from the LLC
(33:59):
lawsuit because he's not the owner.
And you might have to provide the proof of that.
And proof of it is your account of you're not the owner.
And you might have to provide one page of your operating
agreement that shows that you how much ownership you have,
which is 1%. You don't show them the entire
(34:21):
operating agreement. It's just the one page and they
would have to force you or provethat you are the owner.
If you say you're not the owner,then you're not the owner and
then let him sue him. That's why I told him I said let
him do it. Let him spend all this money.
They're never going to get anything from you because it's
non charging and because it's weput a non disclosure agreement
(34:41):
in your contract. You can't tell him who owns that
LLC which is a different LLC that he can controls.
So the reason you do things in LLCS is for asset protection,
nothing to do with taxes. Now, here's the other thing that
most people do wrong, and I did it wrong for many, many years.
(35:02):
I'd buy a piece of real estate and I'd put that in the LLC and
then I'd have the tenant, because their rental properties
pay that LLC rent. And so the tenant knew they, you
know, because they paid rent to ABC Realty LLC.
Or it'd be like, I don't know, ABC or 123 Main St.
(35:24):
LLC 'cause my LLCS, when I buy real estate, I just do whatever
their address is. So 123 Easy Easy Street LLC and
I'd have him pay rent to that, that LLC which had his own bank
account, and then that LLC wouldfile his tax returns.
And then I learned that's not the way to do it because if you
(35:45):
have your tenant paying the LLC that the house is in and there's
an issue with your tenant, then they sue that LLC and that LLC
does have assets in it. And now you potentially could
lose those assets. So instead you buy your real
estate and you put it in an LLC that you are not the owner of.
(36:08):
You're the manager, but not the owner.
And then you do an agreement between the property LLC and
your property management WyomingLLC.
So the tenant pays the property management LLC in Wyoming.
And if they want to sue somebody, they sue the property
(36:29):
management company, not your personal LLC where the house is
located. And then if the the attorney
goes and says where do you live?And they're like, I live on 123
Easy Street and they go and theylook up the address on the clerk
and recorders website. They'll see 123 Main St. is
owned by 123 LLC. And then they go and they
(36:54):
research who owns 123 LLC and they see J2 Management.
Well, who's J2 Management? That's the property management
company in Wyoming. Who owns that?
They go to the Secretary of State's address or website, type
in J2 management. No owners, only the
incorporator, and now they're ata dead end, so their only choice
(37:19):
is to sue the property management company because
that's who the contract's with. Well, the property management
company has no assets. And so if they sue the property
management company and win for some reason, OK, we're back to
where we were before. File the lien against the
company and get in line because I'm never going to pay you
because I have no assets and I have no cash.
That's the proper way to set up your LLC's for your real estate.
(37:42):
You already know the game is rigged, but what you might not
know is there's a legal way to flip the script.
I'm also in a live three day workshop called Winning the Tax
Game. Inside I'll show you exactly how
I've paid just a few $100 in income tax over the last 10
years. Legally, ethically and by the
book. You'll learn how to turn your
(38:04):
biggest expenses into the biggest business tax write offs.
You'll learn how to bulletproof your assets from frivolous
lawsuits and how to play by the real IRS rulebook, the one the
wealthy use. If you're a business owner and
you're sick of giving 30 to 50% of your profit over to your
silent partner, the IRS, then goto winningthetaxgame.com and
(38:27):
reserve your seat. Let's stop donating to the IRS.
It's time you learn how to win. So go to winningthetaxgame.com
and get registered today. Now what if you have an LLC,
you're doing business as well. If you're making, you know,
let's say $50,000 or more in your LLC, well, you might want
(38:54):
to file IRS Form 2553. That's IRS Form 2553.
IRS Form 2553 allows you to elect to be taxed as a S
corporation. See, there is no such thing as a
S corporation, but you can be taxed as an S But you can't just
(39:15):
create an S corporation. You can create a Limited
Liability company, LLC. You can create a corporation and
then the corporation can be taxed as AC Corp or an S Corp.
An LLC can be taxed 4 different ways because remember, LLC's
don't pay taxes, neither do S corporations.
(39:35):
So the LLC can be taxed as a sole proprietor, the LLC can be
taxed as a partnership, the LLC can be taxed as AC Corp, and the
LLC can be taxed as an S Corp. What most people do is they'll
tax it as an S Corp. An S selection form 2553 is one
(39:55):
page form. You fill it out, check the box,
sign it, date it, send it in. That will not save you one
single penny in income tax. Not one penny.
Even though your CPA, your tax preparer has been telling you
you got to do an S Corp, it's going to save you all this money
in taxes. It won't save you one penny in
income tax. In fact you're going to pay
(40:16):
more, most likely in income tax.What it will save you on is
self-employment tax, also known as Social Security, the biggest
Ponzi scheme ever created. It is an absolute complete
waste. It is in my opinion complete
fraud to make us pay 15.3% of everything we make into a
(40:41):
program that has no money left and will never pay us back what
we even put in. So I do everything in my power
not to pay into Social Security or self-employment tax S
elections are one way to do that.
So with an LLC you can just do adraw.
You need $10,000 a month, you pull $10,000 a month out and you
(41:03):
pay self-employment tax on it, state income tax, federal income
tax, workman's comp, unemployment insurance,
etcetera. If you're an S Corp, you're
required to do a reasonable salary.
Well, here's where people get introuble.
I ask people all the time, oh, what do you do?
What do you do for work? Oh, I'm the owner of this and
(41:23):
I'm the owner of that, or I'm ACEO of this company or CEO of
that company. Well, here's the problem.
Anytime you're the owner means you can be held personally
liable. Second problem, I'm ACPA.
If you put CPA on your tax return under the title, there's
a reason they ask for that. If you put CEOCFOCOO or any of
(41:44):
the other alphabet soup, or you put vice president or president,
you're notifying the IRS what your reasonable salary should
be. So if you say I'm the CEO, well,
they're going to go well, CE OS reasonable salaries, $100,000
plus depending on what state youlive in.
(42:05):
So if you live in California, you better have a $200,000
minimum salary. If you're CEO.
See how that that's not that's not helping you.
And here's why Your CPA told youto do an S selection to save on
income taxes. And it doesn't save you on
income taxes, saves you on self-employment tax because
you're required to take out a reasonable salary.
(42:27):
If you're not making hundreds ofthousands of dollars a year, you
might not want to do an S Corp. For example, if you were living
in California and you're making $200,000 net after all your
expenses and you're the CEO, then you probably should take
all 200,000 out as a salary because you have to have a
(42:48):
reasonable salary. But if you weren't the CEO and
maybe you were just a manager ora secretary, now if you make
$200,000, a secretary's reasonable wage might be 40
grand. And now you take of the 200
(43:08):
grand, you take 40,000 out via asalary, you pay self-employment
tax on that at 15.3% and then the remaining 150,000 or 160,000
that you pull out of the companyis a distribution and you don't
have to pay self-employment tax on it.
See that's the advantage of an Selected LLC or an S elected
(43:32):
corporation is you can pull money out of the company and not
pay self-employment tax. It doesn't save you any money in
income tax. Don't let your CPA misinform you
of that. It saves you only in
self-employment tax. Not much different in asset
protection other than if you getsued and it's a S corporation.
(43:57):
So it's an A Inc An Inc, A corporation taxes an S and you
get sued. In Wyoming there is charging
order and they can take charge of your company.
They can levy your bank accountsand they can take all your
assets. If it's an LLC then they can't
regardless of how it's taxed. The Wyoming doesn't care about
(44:18):
how it's taxed. It's LLC or corporation, so if
you want maximum asset protection, you do an LLC taxed
as an S Corp if you're pulling more than $100,000 a year out of
your company. Which brings me to C Corps.
They're the oldest of all of entities they've been around
(44:40):
for. I don't know.
I heard that Christopher Columbus and the Spaniards, when
they were sending people over, they actually had corporations
because people were leaving Spain and Europe to discover the
New World, and many of them didn't come back.
And so the families were suing these ship companies.
(45:02):
And so they created corporationsback 800 years ago.
So C corporations are what all publicly traded companies are.
If you're going to sell your business, if you're building a
business to sell it, you're mostlikely want to set it up as a
Delaware C Corp because you get a $50 million exemption when you
(45:24):
sell if it is AC Corp and you'reselling the shares of the
company, not the assets. So that's something to think
about, $50 million exemption if you simply change your
structure. Think about that.
If you lived in California and you build $100 million company
(45:44):
and you go to sell it, you're going to pay twenty $25 million
in taxes. Whereas if you did that, if you
set up your structure properly, you'd pay half of that tax
because the 1st $50 million is exempt from income taxes.
Just doing one thing, your structure.
(46:06):
Remember, that's what I said in the beginning.
Your structure is the most important thing, determines
whether you're going to be in business or not Why?
Because structure set up properly can eliminate 100% of
your personal income tax, which means you're way more profitable
now than your competition and structure prevents you from ever
losing any of your assets due tofrivolous lawsuits.
(46:26):
It's your structure. So if you're AC Corp, if you're
somebody's building a business to sell it, I would do it as a
Delaware C Corp so you could sell it and get the 1st $50
million tax free. The problem with C Corps is
this. When money goes in, C corps are
(46:47):
the only companies that actuallypay income taxes.
Partnerships don't pay, Sole proprietors don't pay.
LLCS don't pay, S corps don't pay taxes.
Those are what's called flow through entities.
All the taxes flow through to you via AK1 at the end of the
year. So you do your tax returns for
the business, the profit shows up on AK1, the K1 is assigned to
(47:11):
the members, shareholders of those companies.
And then you as the owner or shareholder, a member of the
company, you pay personal incometax.
That's how taxes work with businesses.
With C corporations, they pay 21% of the tax upfront.
So if your C Corp made $100,000 in profit, the C Corp is going
(47:35):
to pay $21,000 in tax and then the remaining $79,000 will be
distributed to the shareholders and then the shareholders will
pay their income tax based on their rates.
So that's why it's called doubletaxation.
If you want to avoid double taxation, you don't do your
(47:57):
business as AC Corp, you do it as an LLC or an LLC taxed as an
S Corp. If you're wanting to build a
business to sell it, then you doit as AC Corp in Delaware
because of the programs that allow you to sell it for the 1st
$50 million tax free. So the problem with C Corps is
(48:22):
the double taxation. But earlier I said I use sole
props LLCS, S Corps and C Corps combined.
See each one of these entities by themselves provide one thing
but not the other one. LLCS provide great asset
(48:43):
protection, have done properly, but no tax reduction.
S corporations could potentiallyreduce your self-employment tax,
but they don't provide you with the best asset protection.
And if you put assets in this S corporation and you later sell
those assets, you have to pay taxes on it.
So that's no good. AC Corp by itself is great asset
(49:05):
protection, horrible for taxes because you got a double tax,
21% going in, 35 to 50% going out.
But if you combine all of them together in what I call the
fortress structure, you get the asset protection and the tax
benefits, but only if it's combined together.
(49:29):
So I hope you enjoyed today's podcast.
Hope you learned a lot you in ifyou didn't listen to the podcast
again, watch the video again. If you are business owner, you
make over $300,000 a year and you're like man, I, I need
someone to protect me, protect my assets.
I'm tired of paying the IRS. So if you're paying more than 30
grand a year to the IRS, go to my website ronnielambert.com.
(49:52):
Sign up for a free consultation.Go to ronnielambert.com, sign up
for a free consultation. So if you're paying 2530
thousand or more in income tax, I could probably cut that down
to 0. I know for a fact I can do 1
corporate change and cut it in half immediately.
I don't care who your CPA is, I don't care how many deductions
(50:13):
they do. Changing your structure will
eliminate 50% of your income taxday one.
So if you're paying $100,000 in income tax, well now we're
talking because if I could take that down to 0, put an extra
$100,000 in your pocket, how would that change for you?
(50:33):
How would your life change? How would it feel to have an
extra 100 grand, 200 grand? I met with someone yesterday
that paid $2.8 million last yearin personal income tax, and
we're going to take them to 0. That's right.
Last year they paid 2.8 million.Now I'm going to take them to 0
(50:57):
personal income tax, whether it's $27,000 or $2.8 million,
there's no reason for you to paythe IRS more than legally
required to pay. And according to Forbes, they
did a 20 year study and Forbes found out of 10s of thousands of
(51:17):
business owners, they looked at their tax returns, 93% of them
paid more in tax than legally required to pay 93%.
So if you're a business owner and you're listening right now,
you're probably in the 93% because here's the here's the
truth. There's one tax code, but 2 tax
(51:41):
systems, 1 tax code, 2 tax systems.
There's the tax system for the informed and the tax system for
the uninformed. And most people are in the
uninformed, and they're paying more in taxes than legally
required to pay. So I asked you why?
(52:01):
Why are you tipping the IRS? Why are you giving them the 20%
tip? An extra 15%?
Why are you tipping them at all?Are they providing you with such
great customer service that you think they deserve a 20% tip?
I don't tip the IRS. I pay what I'm legally required
(52:23):
to pay and not one penny more. I want you to remember
something. If you get nothing out of
today's podcast or video than this then that's OK.
Just remember this one thing. How much money you make is not
as important as how much money you keep.
(52:46):
So you could make $5,000,000 a year and spend 5 million to be
worse off than the guy that's only making 50 grand saving
10,000. How much money you make is not
as important as how much money you keep.
You need to keep more of it. The more you get to keep, the
better your life is. The better your family's life
is, the better your community, your neighborhood, your state,
(53:08):
your country, and ultimately theworld.
See, if we would stop as Americans, stop tipping the IRS,
then Congress wouldn't have any money to waste.
The most patriotic thing that you can possibly do for your
country, for your family, is to stop overpaying in income taxes.
(53:31):
93% of business owners, according to Forbes, pay more in
taxes than legally required to pay by almost $56,000 per year.
In a 20 year span, that's $1,000,000.
You're tipping the IRS. That could be in an interest
bearing account with your name on it, paying you 5% interest
(53:53):
per year. How would that feel?
Just to have a bank account, no strings attached, just growing
tax free. Stop tipping the IRS.
Do something about it. Reduce your income taxes.
If you'd like a free consultation, go to my website,
ronnielambert.com. That's ronnielambert.com.
Glad to be with you today. If you found value in today's
(54:16):
video, please share it with yourfriends, your family because
that's how the podcast grows. Have a great day.
76% of Americans live paycheck to paycheck and according to
Forbes, 93% of business owners pay more than legally required
to pay an income tax. And nearly 50% of all Americans
have bad credit, but not you, atleast not anymore.
See, this is the school of wealth where you learn how to
(00:21):
maximize your credit, minimize your taxes, and multiply your
assets so you can create generational wealth.
Hi, I'm Romney Lambert, certified FICO credit
professional, author, speaker and tax strategist.
For the last 20 years, I've helped 10s of thousands of
Americans just like you take control of their money, fix
(00:42):
their credit, wipe out their debt, cut their taxes by 50% and
multiply their assets. If you're ready to break free
from the rat race and start building a life of freedom and
abundance, then you're in the right place.
Welcome to the School of Wealth.Hello and welcome to the show.
(01:03):
Today we're going to talk about the one thing that will
determine whether you stay in business or not.
See, 80% of business owners willfail within the first five years
of opening the business and thenit's 92% of businesses will fail
within the 1st 10 years. So there is essentially a 92%
(01:26):
chance or higher that if you started a Business Today, in the
next 10 years you'll be out of business.
And the one thing that determines this more than any
other item is structure and how your business is structured.
And today I'm going to teach youhow to structure your business
(01:49):
in a way that will protect you from frivolous lawsuits, but
it'll also limit how much you pay in personal income tax,
potentially taking you to a 0 percent tax bracket.
Now, I've paid very little income taxes my entire life.
In fact, last year I paid $316.00.
(02:13):
That's it. Not 316,000 dollars, $316.00.
And that $316.00 that I owed taxes was not even income tax,
it was self-employment tax. See I referred someone to a
insurance agent and because I also have a life insurance
license I received a Commission and it was approximately $2000
(02:38):
and self-employment tax on that Commission was owed for a total
of $316.00. So I paid no state income tax
last year I paid no federal income tax and the only
self-employment tax that I paid was on $316.00.
Now if you looked at the top line of my tax return, you would
(02:59):
expect to have seen me pay 7 figures in taxes.
And if I was using a typical CPAlike most business owners do, I
would have paid 7 figures. But because of the structure
that I have my businesses in, the businesses that I manage,
that I can control, but I don't own them anymore.
(03:21):
See, I don't own anything. I don't own a house.
I don't own a car, I don't own an airplane, I don't own
apartment complexes, I don't ownany businesses.
And I guess that's not 100% truethat I don't own anything,
because I actually do. I own this jacket, I own this
(03:41):
aura ring that I have on, and I own this new Apple Watch that I
got yesterday, but I don't own this phone.
This phone is not mine. Technically, I guess I own this
coffee cup that's got some cold brew in it.
But this microphone in front of me, I don't own this.
I don't own the boomstick. I don't own the cord.
(04:01):
I don't own the camera. I don't own the screens in front
of me, the green screen behind me, the desk in front of me, or
the computer that this is recording on or the house that
I'm sitting in in my studio. I don't own any of it, but I can
control all of it. See, I truly live the lifestyle
of own nothing, control everything.
(04:26):
So what I'm getting ready to go over today on today's podcast is
something that I have been doingfor years.
I've been in the tax game for decades.
This is not some new thing for me.
It's just new for me to present it to the public now.
I presented it over the last 20 years with my financial
(04:46):
education company, but not at this level.
And now I'm offering to the public the service that I've
been do or the structure that I've been doing for decades, the
structures that my friends have been doing for decades,
Thousands of individuals that I know through my friends and
(05:06):
other acquaintances, we all do the same structure.
None of us have ever been audited.
In fact, it's the same type of structure that every single
Fortune 500 company does. It's how Hollywood manages all
of their money and their structures.
It's how the music industry manages their assets, their
entities, their structures, and their money.
(05:29):
It's how the wealthy are able toown nothing, control everything,
and pay little to no income tax.And I'm going to share that with
you today. So let's get into it.
All right, So the first thing wegot to talk about is structure.
What is a structure? Now, when I'm talking about
structures, I'm talking about LLC's, sole proprietorships,
(05:50):
partnerships, S corporations andC corporations, and limited
liability partnerships. So all of those fall into what I
call a structure, and all of those are regulated by the
Uniform Commercial Code, UCC. So UCC is the second most
powerful law in the land, only second to the Constitution.
(06:14):
The Constitution is the most powerful law in America and you
could argue in the world. Everything here in America runs
under the Constitution. And you hear this.
It's our constitutional right tohave freedom of speech.
It's our constitutional right tobe able to protect ourselves and
bear arms. It's our constitutional right to
(06:35):
not have someone just come into our house illegally there.
So there's all of these constitutional rights.
That is the number one law you could argue in the world #2 is a
Uniform Commercial Code UCC. And the UCC is what regulates
what you and I do in commerce. That what's what regulates the
(06:57):
banks. It's what regulates really the
States and how they manage LLCS and sole proprietorships and
partnerships and C Corps and S Corps, etcetera.
So that's corporate law. So when I talk about structures,
I'm talking about LLCS, C corps,S Corps, partnerships, etcetera.
(07:19):
So in business, generally the way it works is we get started,
we have an idea and outside of if, if it's a tech company or a
Ponzi scheme, you generally don't go to your family and
raise a bunch of money. Generally the only time you need
to do that is if it is a Ponzi scheme, you have no experience
of doing business or it's a startup.
(07:42):
Most people don't need to go raise millions of dollars to
start a business. They have an idea, they launched
the idea, they bring in money, they reinvest the money back
into their business. That's how most businesses get
going. So it's called bootstrapping.
So usually we start out and we can do start out as a sole
proprietor. Now a sole proprietor is you
(08:05):
just go and say this is my business.
You go into the bank and you say, hey, I want to start a
business. I want to open a bank account.
And they're like, oh, OK, what'sthe name of your business?
And we're going to call it Randy's Coffee Mugs, just to
make things simple. Randy's Coffee mugs.
And they're like, oh, what's your business?
Why make coffee mugs? Oh, cool.
Have you incorporated yet? Oh, no, Nope, I'm just getting
(08:27):
started. Oh, so you're going to open a
sole proprietor business account?
Yeah, I guess so. So then the bank set you up with
a bank account as a sole proprietor.
And I do that in quotes because essentially it's just you.
You're the sole member of this group, the sole, SOLE member or
(08:49):
SOUL of the LL of the entity. It's not an LLC yet.
So you're a sole proprietor, which means it's just you.
You're doing business as you have ADBA filed.
Now, some states require that you file your DBA with the
state. You file for a sole
(09:10):
proprietorship name, and then you pay the state a licensing
fee, and depending on the state you're in, you might have to pay
some other types of fees. Some states don't require that
at all, and you need to look it up on whether or not the state
requires it, because if the state doesn't require it, you
(09:32):
don't have to register anything with the state.
You simply go down to the bank, you open up your sole proprietor
business account, and then when you you just manage everything
separately, you put the business, the business deposits
into the business account. You hopefully you're not
commingling your funds and you keep everything separate.
(09:52):
That's the proper way to do it. Unfortunately, many people
commingle and here's the the truth, it doesn't really matter.
It doesn't matter as far as the asset protection side of it
'cause either way you're screwedif you get sued as a sole
proprietor. There is no separation.
(10:13):
Where it does matter is in your taxes.
Now, if you keep track of it andyou separate it and you have one
spreadsheet for personal expenses and one spreadsheet for
business expenses, it's not the proper way to do it.
Will you go to jail over it if you get audited?
No. Is it going to raise some
eyebrows at the with the IRS, with your auditor?
(10:34):
Yes. Will you potentially lose some
of the deductions that were legitimate deductions?
Probably because you're commingling and the IRS wants to
see it separate. So do yourself a favor and open
up a separate bank account for your business and only run money
through that business that's associated with the company.
(10:58):
OK, so that's a sole proprietorship.
Now, when you go to file your tax return, you're still going
to file a regular tax return, except for this time you're
going to have it what's called aSchedule C.
So you'll have your personal taxreturn and then you'll attach a
schedule to it. And that Schedule C is your sole
proprietorship business. So that's the first step or the
(11:21):
first type of structure when it comes to business.
Now you might get ACPA or a tax professional and they're like,
hey, you should incorporate or you should do an LLC to protect
yourselves. And I did that in air quotes.
If you're listening, if you're watching, you saw it, but
(11:42):
they'll they'll convince you to do an LLC.
Now here's the truth. There's not much advantage of
doing an LLC over sole proprietorship for asset
protection. Not really.
And there's not a big benefit with taxes either, because LLCS
don't save you any money in taxes. 0 None.
(12:05):
Nada. Not one penny will you save as
an LLC versus a sole proprietorship.
In fact, I would argue that S elected LLCS, S corporations
also will not save you one pennyin income tax.
In fact, they'll probably cost you more to run it as an S
(12:26):
elected LLC or an S Corp. You'll pay more.
Many times you'll pay more in taxes than you would run pay if
it was just a sole prop or an LLC.
So why would you do an LLC if itdoesn't save you any money on
taxes? What's the whole purpose of it?
It's asset protection. Unfortunately, most people
though start the LLC, but they never finish it the proper way.
(12:51):
And I'll get into that. So we have our sole
proprietorships. We're done with that.
We'll put a pin in it. Everybody, I think by now knows
what a sole proprietor is. So what's a limited liability
company? An LLC?
Well, LLCS were created not too long ago and it was by the state
of Wyoming, State of Wyoming. Wyoming is a very progressive,
(13:14):
forward thinking state. In fact, women were allowed to
vote in Wyoming 50 years before they could vote anywhere else in
America. That's right, Wyoming in their
constitution say that women had a right to vote before the
(13:35):
federal government even gave them a right to vote so they
could vote on local things similar to illegal aliens.
See, there are some cities, somecounties and some states that
allow illegals, people who have invaded our country illegally
that could be technically terrorists, could be rapists,
could be a murderer. There are some states, cities
(13:58):
and counties that allow these criminals, these illegals to
vote. They also let them sit on City
Council. Some states even are trying to
allow them to serve in state politics.
So I digress a little bit. So the state of Wyoming though,
was the first state to allow women to vote 50 years before
(14:22):
they also created the limited liability company, the LLC.
And now all the rest of the states have kind of followed
Wyoming's leadership and createdLLCS for themselves.
So an LLC, like I said, stands for limited liability company.
And it's kind of like what it sounds like a limited liability
(14:46):
company. Now you could have pretty much
as many members as you want in your limited liability company
or LLCLLCS can be owned and controlled by other entities.
They could be owned by AC Corp, they could be owned by an S
Corp. They could be owned by another
LLC. They can be owned and managed by
(15:06):
individuals. They can even be owned and
managed by non citizens of America.
So you could live in Canada and own an LLC in America or you
could live in Mexico and own an LLC in America.
And when I was in Mexico a few weeks ago at a speaker training,
(15:28):
I met with several people that were not from America.
One was from I1, was from Philippines, There was somebody
from Japan there, Brazil, El Salvador, Venezuela, Puerto Rico
and Canada. All of them had LLCS.
In America, LLCS don't pay taxes, so the taxes due go to
(15:54):
the owners. And so that it gets a little bit
more complicated than what what I want to talk about today, but
just know LLCS are limited liability companies, but in all
50 states except for one. So in all of the nation except
(16:15):
for one state does not recognizesingle member LLCS, dual member
LLCS, if it's husband, wife, they only recognize LLCS that
have three members or more that are not part of the immediate
family. So if it's you, your wife and
your daughter or you, your husband and your son, 49 of the
(16:40):
50 states is not going to recognize that as an LLC and
they're going to treat it as a sole proprietorship.
Let me repeat that because I want to make sure you heard
that. 49 of the 50 states currently, as of September 2025,
do not recognize LLCS as LLCS. If it's sole members or
(17:07):
controlled by family members, they don't recognize it.
So what does that mean? That means that if your LLC gets
sued, there is no limited liability protection.
If you get sued, there is no separation between you and the
LLC. So if you have a rental property
and your rental properties inside the LLC and someone slips
(17:31):
and falls and breaks some bones,they're going to sue the LLC.
And unless you live in Texas andthe real estate is in Texas
because Texas is the only state that recognizes LLCS, they're
going to sue you as well. The owners on the other side,
you're an owner of a real estateproperty or a business that's
(17:53):
inside the LLC and you personally get in a car
accident, whether it's your fault or not, and they sue you.
They are going to go after all of your assets inside your LLCS
and there's no protection unlessyou live in Texas.
So unless you live in Texas, if you have an LLC and you're the
(18:13):
100% owner or it's you and your wife or you and your wife and a
sibling, just know that if you ever get sued, there is no asset
protection with that LLC. There's no tax benefit ever with
LLCS and there's no asset protection.
There is no limited liability itwhen it goes to court the judge
(18:36):
will sought the will rule against you, the LLC and the
owner. Do you have collections, charge
offs, even repos on your credit report?
Let me tell you what not to do. Don't ignore it and don't
overpay it. See, most people either panic or
they pay full price, or they bury their head in the sand and
let their credit rot until they get sued.
(18:57):
At Fortress, we help you restructure your debt, settle it
for a fraction of what you owe. And because of the way we
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Now, a lot of the time, the creditor will agree to delete it
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(19:18):
strategy. So click the link in the bio to
learn more or go to fortressu.com.
So why would you put anything inan LLC?
Why would you go through the headache the fees pay for the
extra tax return? Because when it goes into an
LLC, it's now a separate tax return.
(19:45):
So it's going to be a 1065 as a partnership unless you have it
taxed as an S selected LLC, which we'll talk about later,
which would be 1120 S form. So why would you even do the
LLC? Well, you would do it for asset
protection, but here's what you need to know in order to get the
(20:06):
asset protection that you are seeking with an LLC.
You can't be the only member, You and your family can't be the
only members. And so the proper way to do it
is you have ownership in it. Maybe your spouse has ownership,
which I don't like seeing. I like to see maybe a child or
(20:30):
an adult child that doesn't livewith you.
And then the third owner is another Wyoming LLC.
It's a holding company. It's a Wyoming LLC that owns 98%
of your state LLC, the one that's doing business with the
world, the operating LLC. I call it the pawn, as in the
(20:51):
chess pieces. The ponds have a very important
role in the game of chess, but many times they're disposable.
And that's how you want to set up your working LLCS, because
you want them to be disposable. No assets, no large sums of
money in the bank accounts. They're just, they're, they're
(21:14):
the face of the business, if youwill.
But there's nothing behind it. There's no assets in it and I'll
explain a little bit later why you want to do it that way.
So if you want to properly set up your your LLCS for the
maximum amount of asset protection, you cannot be the
sole owner of the LLC. There needs to be other partners
(21:35):
involved. And once you hit three members
or more is when the asset protection kicks in.
So if it's you and your wife andanother person, but it wasn't
3333 and 33, it's you have 1%, your wife has 1% and the other
person has 98. Now you get limited liability
(21:56):
coverage and protection. Or if it's you, your wife and an
LLC and the LLC and additional LLC is a member, then you would
get the limited liability protection.
So you might be thinking, well, what good is that?
If I have an LLC and I'm not theowner, like how do I benefit
from that? Why would I be trying to build
(22:16):
this big business? Well, you might not be the
owner, but you would be the manager.
So you can control everything. So who's really the owner of
this LLC? Well, it's another LLC that you
manage and control. See if you have a holding
company that's in Wyoming and itowns 98% of your state LLC, your
(22:37):
operating LLC, and that operating LLC gets sued.
You can stand in front of a judge and say, your honor, I
don't own it. I don't even get paid in this
LLC. Who owns it?
Well, if you put it in your operating agreement in your
minutes that you have a non disclosure agreement like I do
for my, my companies and my clients, I have a very, very
(22:59):
detailed, very strict non disclosure agreement that says
that I, as a member of this LLC,I'm not legally allowed to share
with anyone outside this LLC who's involved with the LLC
under no circumstances, especially if I get sued.
And that will hold up in court. In fact, it held up in Supreme
(23:21):
Court last year in July 2024. So the non disclosure agreement
is extremely essential to have it in your minutes or your
operating agreement or your bylaws of your corporations.
So that way if you ever get suedin a company that you manage but
don't own, you don't have to tell the courts who the owner
is. And if the courts really want to
(23:41):
know, they'd have to go to Wyoming and convince a federal
judge to have the state of Wyoming tell them who's in that
company. And that's not going to happen.
Wyoming is never going to release that if there is a
reason. Wyoming is a non reporting
state. See, Wyoming's the only state in
(24:02):
all 50 states that's non reporting, non taxed, and no
charging order. And I'll get into charging order
later. So non reporting means they
won't tell anyone who's inside those LLCS without a federal
warrant. So if you're just some ambulance
chaser, frivolous lawsuit file or a new file lawsuit against my
(24:23):
LLC and it's in Wyoming, guess what?
You're never going to know who'sinside that LLC ever.
And I don't have to report. I don't have to tell you because
of the non disclosure agreement.So it's really important you
have the non disclosure agreements in your minutes or
your operating agreement or yourbylaws.
So that's a limited liability company.
You can have 1000 members in there if you want.
(24:46):
It can be member managed, which means the members of the LLC
manage it, which means all of the members get to vote and have
a say. It can be manager managed, which
means some of the members may get a right to vote and some may
not get a right to vote. So let me break down what that
(25:08):
means. Manager managed, member managed.
I had a gentleman yesterday thatI did a consult with that is
buying a $38 million resort, andhe called me to get some advice
on how to structure that. And I informed him that in order
to raise money, because he's going to raise $15 million for
(25:29):
the down payment, use that down payment for the bank.
And then him and a few other partners are going to own this
property. And I said, well, in order to do
this, you're going to have to register it with the SEC because
you're raising money. And he's like, why would I have
to do that? I said, because it's going to be
a manager managed LLC, which means the managers get to decide
(25:53):
what they do with the money. The managers get to decide what
color the buildings will be painted.
The managers get to decide who they hire, who they fire, how
much they pay. The managers decide these
things, not the members. See, he had raised money in the
past with his LLCS for small businesses, but those were
(26:14):
member managed LLCS, which meantif you put 100,000 in, you have
$100,000 of the shares and you have $100,000 worth of voting
rights. Those are member managed LLCS.
But when you go into the apartment complex world or the
commercial world or the resort world or these big companies,
(26:36):
you want to have a manager managed.
Because if you have 1000 different investors and you want
to go and change the color of the building, you would have to
get approval from the majority of those members, if not all of
them. That's a member managed LLC,
which are not what you want. You want a manager managed LLC
(27:00):
and you can have two managers and 998 members, and those two
managers control that entire LLCand the 998 other members have
no control. And so when you set up these
LLC's, that's how you want to have it is you're a manager.
The LLC that you also manage is a manager, and then the third
(27:24):
person is just a member and theyhave no voting rights.
And so now if you manage the LLCthat owns 98% of the LLC and
you're the manager, guess who controls the management of the
LLC? You do, but you don't own it.
So now you can stand in front ofthe judge with your right hand
up, your left hand on the Bible and solemnly swear that I don't
(27:47):
own anything. I don't own the LLC.
And you're following the law because you don't.
You manage it. And because of the non
disclosure agreement, you can't tell them who's the other owner.
And there's literally just aboutnothing they can do to force
you. Now, if it's a fraud case and
(28:08):
the federal government's involved and you you're running
a Tai Lopez $115 million Ponzi scheme, well, that's probably
not going to protect you much because the federal government
will get the warrant. I'm talking about ambulance
chasers. I'm talking about frivolous
lawsuits. I'm talking about civil
(28:28):
lawsuits, not fraud. Prod is completely different.
OK, so that's an LLC. Now what's the advantage of the
LLC? If properly set up with three
members and run through a state like Wyoming, there's great
asset protection. In fact, because Wyoming is a
(28:49):
non charging state, if you get sued, the LLC gets sued, the
Wyoming LLC gets sued, and you lose, Then the plaintiff who won
could technically get a judgement against you against
the company, and then file that judgement with the Secretary of
(29:12):
State. And now there's a lien filed
against your pawn. Pawn.
Like a pawn in the chess game. They file a lien against your
pawn LLC. Well here's the thing.
Wyoming's a non charging state, which means the courts cannot
take charge of your LLC. They can't force you to sell any
(29:38):
assets, they can't interfere with any contracts.
They can't access funds in your LL in your bank account.
They can't levy it. They can't take charge of your
LLC because it's a non charging state.
So that means that if the company gets sued and you lose,
(29:58):
you don't have to pay the creditor.
That judgement will just get filed against your company and
life goes on. Now, if you don't have it set up
properly and that's your only entity and you don't have a
series of other LLCS, then you might be in trouble because you
can't build business, you can't get funding anymore under that
(30:20):
business. You might not be open a new bank
account. The bank might find out about
the lien and then close your bank account.
So we could create major problems for you if it's your
only company. But if you set it up properly
where it's the disposable company, then who cares?
You're not building business credit under that company
anyway. You're not getting funding.
(30:41):
It has no assets and if the bankcloses it, big deal.
Go open a new bank account, samecompany.
There's nothing they can do to take that money from you because
it's non charging. This is why attorneys generally
do not sue Wyoming based LLCS because the attorney knows
(31:04):
they're most likely never going to receive any funds ever.
So it doesn't lawsuit proof you to use a Wyoming multi member
LLC with a non disclosure agreement and buy sell agreement
and many other things in your minutes and operating agreement.
That doesn't prevent 100% of lawsuits.
It just makes it so you never have to pay.
(31:26):
I had a client recently call me and he was freaking out because
he just got served for a class action lawsuit for accidentally
sending a text message to someone before 9:00 AM.
Come to find out the person thathe texted was a Florida resident
that was vacationing in Hawaii. So there's a four or five
(31:46):
there's, I think it's five hoursdifferent time zone.
No, I think it's 7 hours. I think it's 7 hours different.
And so when he sent out the textmessage at 9:00 in Florida where
the person lives, where they registered their phone number
with the area code, they were actually in Hawaii.
And so they received it in the middle of the night or the early
AM, which violated some federal laws.
(32:09):
And you know, he can get out of that.
He could fight that, go to courtand pay $250,000 in attorney
fees to fight this frivolous lawsuit.
Or he can simply give him the finger and reply back with, I'm
not going to pay you. I'll see you in court and then
don't even show up to court. Why even spend any money on it
(32:31):
at all? Because it's a he's got a
Wyoming based LLC that has no assets.
It is a pawn LLC. It is disposable.
So if they sue it and he loses, which he will cause he's not
even a bother going to court. Why bother fighting this thing?
They're going to get a lien against his LLC that has no
(32:52):
assets in it, no money and they're going to fight.
They're going to spend 10s of thousands of dollars trying to
get him in court and do all thisstuff.
And when it's all said and done,they're just going to get a lien
against a company that has no assets and they're going to get
nothing. Now, he also was concerned
because they named him in the lawsuit because that's how it
(33:13):
works. Remember, I said unless you live
in Texas and you did everything right, there is no separation
with LLCS or sole member S corpse or sole member C corpse.
And so they named him in the lawsuit as well.
And I said, oh, that's easy, file a motion to dismiss.
So you're going to either do this yourself or do have it with
your attorney, file a motion dismiss because you're not the
(33:36):
owner of the company. They just assume you were the
owner and you have to inform them that you're not the owner.
So you're going to file a motionto dismiss, do the fact that
you're not the owner of the LLC.In fact, you're the manager and
you don't even get paid. And so the courts will be
required and forced essentially to remove him from the LLC
(33:59):
lawsuit because he's not the owner.
And you might have to provide the proof of that.
And proof of it is your account of you're not the owner.
And you might have to provide one page of your operating
agreement that shows that you how much ownership you have,
which is 1%. You don't show them the entire
(34:21):
operating agreement. It's just the one page and they
would have to force you or provethat you are the owner.
If you say you're not the owner,then you're not the owner and
then let him sue him. That's why I told him I said let
him do it. Let him spend all this money.
They're never going to get anything from you because it's
non charging and because it's weput a non disclosure agreement
(34:41):
in your contract. You can't tell him who owns that
LLC which is a different LLC that he can controls.
So the reason you do things in LLCS is for asset protection,
nothing to do with taxes. Now, here's the other thing that
most people do wrong, and I did it wrong for many, many years.
(35:02):
I'd buy a piece of real estate and I'd put that in the LLC and
then I'd have the tenant, because their rental properties
pay that LLC rent. And so the tenant knew they, you
know, because they paid rent to ABC Realty LLC.
Or it'd be like, I don't know, ABC or 123 Main St.
(35:24):
LLC 'cause my LLCS, when I buy real estate, I just do whatever
their address is. So 123 Easy Easy Street LLC and
I'd have him pay rent to that, that LLC which had his own bank
account, and then that LLC wouldfile his tax returns.
And then I learned that's not the way to do it because if you
(35:45):
have your tenant paying the LLC that the house is in and there's
an issue with your tenant, then they sue that LLC and that LLC
does have assets in it. And now you potentially could
lose those assets. So instead you buy your real
estate and you put it in an LLC that you are not the owner of.
(36:08):
You're the manager, but not the owner.
And then you do an agreement between the property LLC and
your property management WyomingLLC.
So the tenant pays the property management LLC in Wyoming.
And if they want to sue somebody, they sue the property
(36:29):
management company, not your personal LLC where the house is
located. And then if the the attorney
goes and says where do you live?And they're like, I live on 123
Easy Street and they go and theylook up the address on the clerk
and recorders website. They'll see 123 Main St. is
owned by 123 LLC. And then they go and they
(36:54):
research who owns 123 LLC and they see J2 Management.
Well, who's J2 Management? That's the property management
company in Wyoming. Who owns that?
They go to the Secretary of State's address or website, type
in J2 management. No owners, only the
incorporator, and now they're ata dead end, so their only choice
(37:19):
is to sue the property management company because
that's who the contract's with. Well, the property management
company has no assets. And so if they sue the property
management company and win for some reason, OK, we're back to
where we were before. File the lien against the
company and get in line because I'm never going to pay you
because I have no assets and I have no cash.
That's the proper way to set up your LLC's for your real estate.
(37:42):
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(38:27):
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and get registered today. Now what if you have an LLC,
you're doing business as well. If you're making, you know,
let's say $50,000 or more in your LLC, well, you might want
(38:54):
to file IRS Form 2553. That's IRS Form 2553.
IRS Form 2553 allows you to elect to be taxed as a S
corporation. See, there is no such thing as a
S corporation, but you can be taxed as an S But you can't just
(39:15):
create an S corporation. You can create a Limited
Liability company, LLC. You can create a corporation and
then the corporation can be taxed as AC Corp or an S Corp.
An LLC can be taxed 4 different ways because remember, LLC's
don't pay taxes, neither do S corporations.
(39:35):
So the LLC can be taxed as a sole proprietor, the LLC can be
taxed as a partnership, the LLC can be taxed as AC Corp, and the
LLC can be taxed as an S Corp. What most people do is they'll
tax it as an S Corp. An S selection form 2553 is one
(39:55):
page form. You fill it out, check the box,
sign it, date it, send it in. That will not save you one
single penny in income tax. Not one penny.
Even though your CPA, your tax preparer has been telling you
you got to do an S Corp, it's going to save you all this money
in taxes. It won't save you one penny in
income tax. In fact you're going to pay
(40:16):
more, most likely in income tax.What it will save you on is
self-employment tax, also known as Social Security, the biggest
Ponzi scheme ever created. It is an absolute complete
waste. It is in my opinion complete
fraud to make us pay 15.3% of everything we make into a
(40:41):
program that has no money left and will never pay us back what
we even put in. So I do everything in my power
not to pay into Social Security or self-employment tax S
elections are one way to do that.
So with an LLC you can just do adraw.
You need $10,000 a month, you pull $10,000 a month out and you
(41:03):
pay self-employment tax on it, state income tax, federal income
tax, workman's comp, unemployment insurance,
etcetera. If you're an S Corp, you're
required to do a reasonable salary.
Well, here's where people get introuble.
I ask people all the time, oh, what do you do?
What do you do for work? Oh, I'm the owner of this and
(41:23):
I'm the owner of that, or I'm ACEO of this company or CEO of
that company. Well, here's the problem.
Anytime you're the owner means you can be held personally
liable. Second problem, I'm ACPA.
If you put CPA on your tax return under the title, there's
a reason they ask for that. If you put CEOCFOCOO or any of
(41:44):
the other alphabet soup, or you put vice president or president,
you're notifying the IRS what your reasonable salary should
be. So if you say I'm the CEO, well,
they're going to go well, CE OS reasonable salaries, $100,000
plus depending on what state youlive in.
(42:05):
So if you live in California, you better have a $200,000
minimum salary. If you're CEO.
See how that that's not that's not helping you.
And here's why Your CPA told youto do an S selection to save on
income taxes. And it doesn't save you on
income taxes, saves you on self-employment tax because
you're required to take out a reasonable salary.
(42:27):
If you're not making hundreds ofthousands of dollars a year, you
might not want to do an S Corp. For example, if you were living
in California and you're making $200,000 net after all your
expenses and you're the CEO, then you probably should take
all 200,000 out as a salary because you have to have a
(42:48):
reasonable salary. But if you weren't the CEO and
maybe you were just a manager ora secretary, now if you make
$200,000, a secretary's reasonable wage might be 40
grand. And now you take of the 200
(43:08):
grand, you take 40,000 out via asalary, you pay self-employment
tax on that at 15.3% and then the remaining 150,000 or 160,000
that you pull out of the companyis a distribution and you don't
have to pay self-employment tax on it.
See that's the advantage of an Selected LLC or an S elected
(43:32):
corporation is you can pull money out of the company and not
pay self-employment tax. It doesn't save you any money in
income tax. Don't let your CPA misinform you
of that. It saves you only in
self-employment tax. Not much different in asset
protection other than if you getsued and it's a S corporation.
(43:57):
So it's an A Inc An Inc, A corporation taxes an S and you
get sued. In Wyoming there is charging
order and they can take charge of your company.
They can levy your bank accountsand they can take all your
assets. If it's an LLC then they can't
regardless of how it's taxed. The Wyoming doesn't care about
(44:18):
how it's taxed. It's LLC or corporation, so if
you want maximum asset protection, you do an LLC taxed
as an S Corp if you're pulling more than $100,000 a year out of
your company. Which brings me to C Corps.
They're the oldest of all of entities they've been around
(44:40):
for. I don't know.
I heard that Christopher Columbus and the Spaniards, when
they were sending people over, they actually had corporations
because people were leaving Spain and Europe to discover the
New World, and many of them didn't come back.
And so the families were suing these ship companies.
(45:02):
And so they created corporationsback 800 years ago.
So C corporations are what all publicly traded companies are.
If you're going to sell your business, if you're building a
business to sell it, you're mostlikely want to set it up as a
Delaware C Corp because you get a $50 million exemption when you
(45:24):
sell if it is AC Corp and you'reselling the shares of the
company, not the assets. So that's something to think
about, $50 million exemption if you simply change your
structure. Think about that.
If you lived in California and you build $100 million company
(45:44):
and you go to sell it, you're going to pay twenty $25 million
in taxes. Whereas if you did that, if you
set up your structure properly, you'd pay half of that tax
because the 1st $50 million is exempt from income taxes.
Just doing one thing, your structure.
(46:06):
Remember, that's what I said in the beginning.
Your structure is the most important thing, determines
whether you're going to be in business or not Why?
Because structure set up properly can eliminate 100% of
your personal income tax, which means you're way more profitable
now than your competition and structure prevents you from ever
losing any of your assets due tofrivolous lawsuits.
(46:26):
It's your structure. So if you're AC Corp, if you're
somebody's building a business to sell it, I would do it as a
Delaware C Corp so you could sell it and get the 1st $50
million tax free. The problem with C Corps is
this. When money goes in, C corps are
(46:47):
the only companies that actuallypay income taxes.
Partnerships don't pay, Sole proprietors don't pay.
LLCS don't pay, S corps don't pay taxes.
Those are what's called flow through entities.
All the taxes flow through to you via AK1 at the end of the
year. So you do your tax returns for
the business, the profit shows up on AK1, the K1 is assigned to
(47:11):
the members, shareholders of those companies.
And then you as the owner or shareholder, a member of the
company, you pay personal incometax.
That's how taxes work with businesses.
With C corporations, they pay 21% of the tax upfront.
So if your C Corp made $100,000 in profit, the C Corp is going
(47:35):
to pay $21,000 in tax and then the remaining $79,000 will be
distributed to the shareholders and then the shareholders will
pay their income tax based on their rates.
So that's why it's called doubletaxation.
If you want to avoid double taxation, you don't do your
(47:57):
business as AC Corp, you do it as an LLC or an LLC taxed as an
S Corp. If you're wanting to build a
business to sell it, then you doit as AC Corp in Delaware
because of the programs that allow you to sell it for the 1st
$50 million tax free. So the problem with C Corps is
(48:22):
the double taxation. But earlier I said I use sole
props LLCS, S Corps and C Corps combined.
See each one of these entities by themselves provide one thing
but not the other one. LLCS provide great asset
(48:43):
protection, have done properly, but no tax reduction.
S corporations could potentiallyreduce your self-employment tax,
but they don't provide you with the best asset protection.
And if you put assets in this S corporation and you later sell
those assets, you have to pay taxes on it.
So that's no good. AC Corp by itself is great asset
(49:05):
protection, horrible for taxes because you got a double tax,
21% going in, 35 to 50% going out.
But if you combine all of them together in what I call the
fortress structure, you get the asset protection and the tax
benefits, but only if it's combined together.
(49:29):
So I hope you enjoyed today's podcast.
Hope you learned a lot you in ifyou didn't listen to the podcast
again, watch the video again. If you are business owner, you
make over $300,000 a year and you're like man, I, I need
someone to protect me, protect my assets.
I'm tired of paying the IRS. So if you're paying more than 30
grand a year to the IRS, go to my website ronnielambert.com.
(49:52):
Sign up for a free consultation.Go to ronnielambert.com, sign up
for a free consultation. So if you're paying 2530
thousand or more in income tax, I could probably cut that down
to 0. I know for a fact I can do 1
corporate change and cut it in half immediately.
I don't care who your CPA is, I don't care how many deductions
(50:13):
they do. Changing your structure will
eliminate 50% of your income taxday one.
So if you're paying $100,000 in income tax, well now we're
talking because if I could take that down to 0, put an extra
$100,000 in your pocket, how would that change for you?
(50:33):
How would your life change? How would it feel to have an
extra 100 grand, 200 grand? I met with someone yesterday
that paid $2.8 million last yearin personal income tax, and
we're going to take them to 0. That's right.
Last year they paid 2.8 million.Now I'm going to take them to 0
(50:57):
personal income tax, whether it's $27,000 or $2.8 million,
there's no reason for you to paythe IRS more than legally
required to pay. And according to Forbes, they
did a 20 year study and Forbes found out of 10s of thousands of
(51:17):
business owners, they looked at their tax returns, 93% of them
paid more in tax than legally required to pay 93%.
So if you're a business owner and you're listening right now,
you're probably in the 93% because here's the here's the
truth. There's one tax code, but 2 tax
(51:41):
systems, 1 tax code, 2 tax systems.
There's the tax system for the informed and the tax system for
the uninformed. And most people are in the
uninformed, and they're paying more in taxes than legally
required to pay. So I asked you why?
(52:01):
Why are you tipping the IRS? Why are you giving them the 20%
tip? An extra 15%?
Why are you tipping them at all?Are they providing you with such
great customer service that you think they deserve a 20% tip?
I don't tip the IRS. I pay what I'm legally required
(52:23):
to pay and not one penny more. I want you to remember
something. If you get nothing out of
today's podcast or video than this then that's OK.
Just remember this one thing. How much money you make is not
as important as how much money you keep.
(52:46):
So you could make $5,000,000 a year and spend 5 million to be
worse off than the guy that's only making 50 grand saving
10,000. How much money you make is not
as important as how much money you keep.
You need to keep more of it. The more you get to keep, the
better your life is. The better your family's life
is, the better your community, your neighborhood, your state,
(53:08):
your country, and ultimately theworld.
See, if we would stop as Americans, stop tipping the IRS,
then Congress wouldn't have any money to waste.
The most patriotic thing that you can possibly do for your
country, for your family, is to stop overpaying in income taxes.
(53:31):
93% of business owners, according to Forbes, pay more in
taxes than legally required to pay by almost $56,000 per year.
In a 20 year span, that's $1,000,000.
You're tipping the IRS. That could be in an interest
bearing account with your name on it, paying you 5% interest
(53:53):
per year. How would that feel?
Just to have a bank account, no strings attached, just growing
tax free. Stop tipping the IRS.
Do something about it. Reduce your income taxes.
If you'd like a free consultation, go to my website,
ronnielambert.com. That's ronnielambert.com.
Glad to be with you today. If you found value in today's
(54:16):
video, please share it with yourfriends, your family because
that's how the podcast grows. Have a great day.
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