Forming an LLC as a Holding Company of a US Patent

Question:

Your Dummies book on LLC is the best I've read. Great job! My question relates to forming an LLC as a holding company of an U.S. Patent. There are 3 reasons for forming the LLC. 1. Protection of Patent from membership liability and membership from LLC liability. 2. Membership can be sold to (transferred) to new members (foreign and domestic) under the rules of private placement. Transaction proceed flows directly to the member who sells his/her membership shares. 3. Royalty from the patent can be partially distributed to members and partially allocated for R&D. Are there any flaws in using LLC to accomplish the above?

Answer:

One of the most intriguing questions MYLLC.com gets asked is if you can form an LLC to hold a U.S. Patent. The resounding answer is not only YES! But it is one of the wisest decisions you can make if you are an inventor. There are three main reasons for that:

1. An LLC offers your patent protection from membership liability and membership from LLC liability.
2. Memberships can be transferred or sold to new member, foreign or domestic, under the rules of private placement offerings.
3. Any royalties earned from the patent can be distributed to members.

Protecting your intellectual property with a US Patent is your first step. Your second should be to contact one of the highly experienced experts at MyLLC.com to determine which state to file your LLC as well as any other services you need to protect your interest. Contact us today to get started!