I just started an engineering/prototype machining LLC. I already own a few CNC machines, and I would use them to make parts for my business. My brother-in-law suggested that I have my LLC pay me a "rental fee" for these machines.

His explanation was that it would make it clear if I sold the business or got sued that these are my personal machines and not owned by the LLC.

What do you all think? And if so, how would I determine the correct "rental fee"?

I am located in the US in the state of Virginia.

1 Answer 1


This is not exactly a personal finance question. I'd suggest to structure your LLC properly with a professional legal and tax advice from an attorney and a EA/CPA licensed in your State.

You should keep track of your contributions to the LLC (which is your basis), have proper bookkeeping, and very clear agreements of what is up for sale if and when you decide to sell things.

I don't think creating an extra set of agreements between you and your LLC is useful, and may potentially lead to another angle of attack for someone who may want to pierce the corporate veil of your LLC. However, on the other hand, if your LLC has additional members then it is pivotal to keep all the agreements (including what belongs to the LLC and what is borrowed and how) in writing and in a top notch shape.

It sounds like you're working with thousands and tens of thousands worth of equipment at least, so spending a couple of hundred dollars on a legal consultation should be a no-brainer.

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