Can a corporation own a timeshare?

[RLDurn]

I am a small business owner, and I am contemplating buying a TS resale to use as an employee incentive. Can a corporation own a timeshare? I don't want to mix business with personal (i.e., buying it personally, but using it for business)
Thoughts?

 

[Talent312]

Corporations can own all sorts of property, everything from fleets of trucks to stadium skyboxes, to downtown apartments for hanky-panky, so why not a TS. You will likely need a BOD resolution authorizing the purchase, corporate officer signatures and such, but its not really any different from any other R/E purchase.

Bear in mind that, if you intend to finance the purchase (not a good idea), the lender may not want to lend without someone's personal liability. Also, bear in mind that the directors have a fiduciary responsibility to shareholders (if its a closely-held corporation, they are likely to be the same), so... Buy "resale," and NOT directly from the resort or developer.

 

[T_R_Oglodyte]

I looked into this one time. There aren't any tax advantages to doing this. If the firm is a LLC, partnership, or S-Corp (any form that reports on a K-1) the timeshare stills end up being treated as personal property on the partnership tax reporting.

I don't see where there are any tax advantages to having it in a C-corp.

Futher if it's used as you suggest for employees than the usage becomes taxable non-cash compensation.

 

[RLDurn]

I think I am most concerned about what happens if the company goes out of business. We are doing really well, and the employees think it would be a nice perk (there are several nice timeshare resorts within driving distance).

But I have lost a business before. What happens if I buy a TS for cash, but then the company goes down. Am I then personally liable for maintenance fees if it is owned by the corporation?

 

[T_R_Oglodyte]

I think I am most concerned about what happens if the company goes out of business. We are doing really well, and the employees think it would be a nice perk (there are several nice timeshare resorts within driving distance).

But I have lost a business before. What happens if I buy a TS for cash, but then the company goes down. Am I then personally liable for maintenance fees if it is owned by the corporation?

That's a legal question, one that is better asked of your legal counsel.

 

[Garnet]

then personally liable for maintenance fees if it is owned by the corporation?

If you are asking that question....then, yes. You're it. Corporate shield pierced. Lots of (previous, not recent) discussion on putting into partnerships...same thing. Need to have a general partner....

...legal disclaimer...blah blah...not an attorny...advised to seek legal counsel...Garnet had a tough day and is being sarcastic ...blah blah...still, they can go after officers, I'm guessing that is you.

 

[Talent312]

If you are asking that question....then, yes. You're it. Corporate shield pierced.

Totally bogus. The correct answer is... "It depends."
It depends on various factors, not the least of which is the extent to which the business was treated as a personal piggy-bank. But instead of listening to us, half-assed, armchair quarterbacks, ask someone more qualified to explain how liabilities can survive corporate dissolution... like an attorney or CPA.

 

[BocaBum99]

Yes, a corporation can own a timeshare. It happens all the time. However, some resort groups do not allow it. I believe the Shell Vacation Club does not allow a corporation to own in its Club.

The primary reason for putting a timeshare in a corporation is not for tax purposes. It's for liability protection. PCCs put their inventory into the name of a corporation. When it's full of timeshares it can't sell, it just bankrupts it and walks away.

 

[Carolinian]

For most resorts, yes you can own it that way. Some exchange companies, however, will not let corporations be members. RCI for one.

 

[theo]

Some exchange companies, however, will not let corporations be members. RCI for one.

Is not being able to be associated with RCI really a bad thing?

 

[RLDurn]

Interesting. Thanks for the input. I think I go about it differently.

 

[ctyatty]

I know someone who has a TS owned by John Smith Inc., then the corp registered the tradename John Smith and it is a member as John Smith with RCI. Since RCI isn't the wiser there is no problem.

Discrimination based on corp status, that's a new one!