Single Asset LLC

Are Single Asset Entities Part of Your Plan?

Whether you are expanding your real estate investment portfolio, opening a new location, or you just bought your dream yacht, Single Asset Entities should be part of your asset protection plan. Single Asset Entities, or Single Purpose Entities, are vital tools used to protect your hard-earned assets from creditors, and to protect you from the risks and liabilities associated with asset ownership.

Asset protection is not the only reason to consider a Single Asset Entity. Businesses should consider Single Asset Entities for improved management of assets and liabilities, along with project specific protection from operational or insolvency issues. Commercial lenders can utilize Singe Asset Entities for additional security in the event of a borrower's insolvency.

Individuals can also benefit from the numerous tax advantages that arise from ownership of major assets through Single Asset Entities. Federal estate taxes can be avoided by using Single Asset Entities as part of a plan for generational wealth transfer. In California, Sales and Use Tax on major assets, such as boats and planes, can also be eliminated through the use of Single Asset Entities.

At p.Law, our attorneys are excited about the opportunity to develop specific entities to meet your goals.

Benefits of a Single Asset Entity

Limit Personal Liability

Owning major assets entails risk. Utilization of a separate entity allows owners to limit their risk to the value of the asset.

Isolate Liability

Single Asset Entities can prevent “liability spillover” by isolating the risk associated with certain assets.

Protect Assets

Insurance is loss prevention, not asset protection. Your asset protection plan should include more than just insurance.

Privacy Benefits

Owning assets through an entity provides an extra degree of privacy, making it harder for the general public to know who actually owns the asset.

Tax Benefits

There are numerous tax benefits to owning an asset through an entity. Possible benefits include eliminating California Sales and Use tax and bypassing Federal estate taxes.

What is a Single Asset Entity?

A Single Asset Entity (SAE) in its simplest form is a separate legal entity that is formed specifically to hold one asset. One asset, one entity, period.


The terms Single Asset Entity (SAE) and Single Purpose Entity (SPE) are commonly used interchangeably. Single Purpose Entities is a broader term that encompasses SAEs. An SAE will almost always be an SPE, but an SPE will not always be an SAE.

For example, suppose a successful restaurateur is expanding into a new location. A subsidiary company, in the form of a Single Purpose Entity, is formed for this endeavor. The subsidiary purchases the new location and begins operations. This subsidiary functions to isolate the new venture from the other locations, but not from itself. Stronger asset protection could be achieved by creating a Single Asset Entity to own the building, and then lease the space to the Single Purpose Entity. If a liability arose because of the restaurants operations, the building would still be protected.


A Special Purpose Entity, also commonly abbreviated SPE, is a distinct form of Single Purpose Entities utilized in the acquisition and financing of specific assets. Creditors use Special Purpose Entities to avoid the costs and risk of a potential bankruptcy filing by a business debtor. This is why Special Purpose Entities are referred to as a bankruptcy remote entity.

Lenders can learn more about bankruptcy remote entities and the additional benefits that can be achieved through them by clicking here: Learn More About Bankruptcy Remote Entities

How to Form a Single Asset Entity

Choose the Entity Type

Your individual goals in forming a Single Asset Entity will dictate the best entity type for your situation.

File with the State

You will need to incorporate your entity by filing the proper paperwork with the Secretary of State. Depending on your needs, a strong purpose clause may be advisable.

Develop an Operating Agreement

Your entity choice will dictate the initial agreements you need in place. Some variation of an operating agreement will need to be put in place. Give careful consideration to the terms and clauses you use in your operating agreement.

Capitalize the Entity

One method of capitalization is through the contribution of assets. Property subject to a mortgage will generally need the consent of the lender. If multiple parties have an interest in the entity determining the property’s tax basis will be of key importance.

Do the Work

Maintaining the liability protection afforded by the Single Asset Entity requires work. Remember, a judge must be able to distinguish between the entity and you. Foregoing proper procedure will destroy the very protection you were seeking.

Is a Single Asset Entity Right For You?