Idaho Business Law What Kind of Property can a Corporation Own
By Lane V. Erickson, Idaho Business Attorney
I will start this article by saying congratulations to you! If you are reading this article it is because you either have already started your own corporation or that you are thinking about doing so. For more than 70 years the attorneys at the Racine law office have helped individuals both create and operate their businesses through corporations, LLCs, Partnerships, and other entity options. We enjoy working with business clients because we find them to be ambitious, motivated, and fun to work with.
At the Racine law office our team of Idaho business attorneys understand the importance of properly setting up a corporation and in following all the requirements and laws in Idaho to make sure that the business will operate both legally and validly. Our team includes partners Lane Erickson and TJ Budge, and attorneys Nate Palmer and Dave Bagley. Our attorneys have decades of experience, knowledge, and skill in helping business clients deal with all of their business needs.
After having helped numerous clients create and start a business, including various types of corporations, I’ve come to realize that one of the basic questions I am asked is what type of property can the business own? The purpose of this article is to describe The types of property that a business can own and what can happen with that property within the business operations.Real Property
We will start with real property. A business entity, such as a corporation, an LLC or a partnership can own real property separately from any other person or entity. Real property includes any type of land, homes, buildings, farm ground, commercial property, and just about any other kind of real estate that you can think of. A couple of examples will help illustrate what this means.
Several years ago I decided personally to purchase investment properties. I purchased several duplexes to rent for others to use for residential living. Rather than owning these duplexes individually, I set up LLCs to act as the owner of each of the duplexes. To do this, when the properties were purchased, the deed transferring title to these properties was made out in the name of the various LLC entities that I own. As a result, the LLCs own the duplexes rather than me individually.
As an additional example, we often help individuals who own farming operations set up a separate corporation or other entity that will own the farm ground. The farm ground is then often least to the corporation or entity that handles the operation of the farming business. In this way, neither the individual owners nor the family farming operation actually owns the farm ground. Rather, it is separately owned buy a different corporation. Again, this ownership is evidenced by the actual deed transferring title to the farm ground.Personal Property
In a similar way, a corporation can also individually own all types and kinds of personal property. This could include any type of machinery and equipment, or vehicles, or office equipment, or any other types of personal property that you could imagine. The personal property that’s owned by the corporation may be used in the actual creation of other types of personal property.
For example, you may have a corporation that manufactures steering wheel covers. the machinery and equipment that is owned by the business is considered personal property. This machinery and equipment may actually manufacture and create the steering wheel covers. Once the steering wheel covers are created they becomes the inventory of the business that is sold for a profit. Any steering wheel covers that are not sold remain in the inventory and also remain the personal property of the corporation.
Usually a corporation is not designed simply to own personal property (other than perhaps inventory). Rather, the personal property owned by the business is usually utilized in some other way that works in conjunction with other real or personal property to provide income and a profit to the business.Intangible Property
The next type of property that a corporation can own is intangible property. This often includes bank accounts, investment accounts, and items such as accounts receivable. Additionally, many types of intellectual property are also included in this category. This would include patents, or patent rights, licenses, or licensing rights, copyrights, and so forth.
Consider the famous photographer Ansel Adams who was world renowned for his black and white landscape photographs of the American West. Because he was the creator of the photographs, he had the ability to print as many or as few of the photographs as he wanted. He then had the ability to market these photographs and to sell them to galleries, institutions, and to private collectors as well. No other person or corporation had the right to print or sell any of Ansel Adams’ photographs because he owed all of the intellectual rights to those photographs. Because of this, the intellectual rights of those photographs were extremely valuable. Many times, Ansel Adams would license the right for other corporations to utilize or use the photographic images he created in books, or as posters, or in some other way. As part of the licensing agreement, Ansel Adams would receive a royalty payment for each item sold.
There are numerous other types and kinds of intellectual or intangible property that a corporation can own as well. These types of items are owned because they are usually valuable and result in income and profits for the business. This article is not exhaustive in discussing the types and kinds of property that a corporation can own. We have assisted numerous business clients in the creation of their business and in understanding the types of property that the business can own, and also in the acquisition and or sale of various types of property. If you have questions about the types or kinds of property that can be owned by your business, we are confident that we can help you too.Enlist an Idaho Business Attorney to Help You
Our team of Idaho business lawyers can help you with any of your business structure or operation needs. Whether you are seeking to create a new business or review a current business, we are available to discuss your options and answer your questions at an initial consultation. Call us toll free at 877.232.6101 or 208.232.6101 for a consultation. You can also email us directly at firstname.lastname@example.org or stop by our office at 201 East Center Street, Pocatello, Idaho 83201. We will answer your questions and help you solve your Idaho business problems.