Entity Formation Checklist (Borrower as DE LLC)

Summary

In an acquisition financing transaction, the borrower/purchaser entity will often be a newly formed entity. A limited liability company is a common entity type used in commercial real estate acquisitions and financing transactions. The borrower may wish to organize the LLC in the state where the property is located to avoid the trouble and expense of registering the LLC in two separate jurisdictions – once in the state in which the entity is formed and a second time in the state where the property is located. However, a commercial real estate lender may require the borrower to form a single purpose Delaware entity to own the property. This checklist outlines the steps required to form a single purpose Delaware LLC for commercial real estate financing transactions.