The Minneapolis journal. [volume] (Minneapolis, Minn.) 1888-1939, 1905-12-17
~HE growth of holding companies
is becoming an interesting fea-

is becoming an interesting fea
- ture of the Minneapolis real
estate market Formation Of new real
estate companies is being constantly
recorded in the office of the register Of
deeds and to the uninitiated this adj
dition to the list of real estate corpo-
rations has been taken to mean such an
new companies found it profitable to
jump in. In many instances it means
simply adoption of new business meth
DDS, or new ways of carrying property.
In many cases the organizations are
formed for the same reason that any
business firm finds it profitable and
good business to incorporate. Works
advantage Of handling business thru
corporations. The arguments advanced
IN these pamphlets apply to the real
estate business as well as to any other.
Two main reasons. exist for the trans
fer of properties in Minneapolis from
Individual holdings, or from company
holdings, to corporations. Banks find
their zeal estate by handling it thru
corporations. Business houses fire.
uuently have found it wise for legal
reasons tc manage their real estate and
buildings separately from the business
corporations, but the late records show
IndG many IdmllleS nave a0OpGeQ Inc
corporation method of holding their
real estate.
To men who have investigated the
subject the holding company has been
found the best agency thru which to
take care of property that is owned by
several individuals. Therefore this APP
plies largely to business properties,
whose titles are frequently in several
persons, as, for instance, the ground oc-
cnnia1 bv Tho G1o GO h1oolY
Convenient for Banks.
Banks, particularly national banks,
form companies to get the real estate
holdings which they have acquired in
the course of business off the books.
BY charging them off to profit and
loss. from the undivided profits or
I, otherwise, and transferring the title to
1 holding companies, they are able to dis
, pose of them separately from the bank
Ing business and to return the amount
. Of the sales to the same column on the
/ bank books after they have been dis
posed of. The Mutual Realty company,
the Hennepin Realty company and the
I, Phoenix Security company were formed
& iu the records as the makers of prop
II ertY deeds.
w The Mutual Building company is the
! name of an organization that controls
b somc Of the property Of one of the
I large wholesale firms. The Security
i Land and Investment company is the
/ rame of a corporation formed to assist
I a leading real estate firm in its, BUSH
ness A, grain firm, for legal reasons,
now carries its property under the name
I Of the Twin City Trading company.
Some of the family concerns formed
I recently to make over the real estate
I possessions standing in the name of its
different individuals have been the s.
! T. Mcknight company, the L. S. Gil
lette Realty company, and most recent
ly the Phelps Richardson Realty COM
pany, to which was transferred this
I week the 'Nicollet avenue property oc-
eupied by Browning, King & Co. for
h'$10O,OOO
If it were not for the necessity Of
70 probating property it is likely that the
chief reason for deciding family prop
erty to family corporation would be
removed; The saving of the probate
passing property thru probate is con-
siderable. When a heavy owner OF
business real estate dies large amount
of valuable property is practically tied
!, up for some time, more or less extended
according to complications. When the
tion all these formalities, red tape and
expense are done away with. The bust
ness continues after the death Of any
member of the corporation the same as
in regular business companies. If the
decedent has signed his stock in blank
before death the way for continuing
49,: the holdings smoothly is much better
paved.
The Inheritance Tax.
Another reason for the rapid increase
i,of family corporations is said to be the
possible confirmation Of the inheritance
tax; law. This tax is believed by some
real estate men to be practically pro-
Inhibition on death, as it has been ex,
pressed. The tax on large estates will
- be such as to take large sum from the
Golfers of the heirs. With the forma
members of the family or probable
heirs have stock certificates, the inner,
ltance tax law will not apply to the
extent that it would if the estate were
distributed according to the terms of 6
will, or if the owner died intestate.
The corporations is a good means oil
~, perpetuatlng an estate and holding il
together. When the value of the prop
erty involved in the death of an owner
us distributed among the heirs as stock
1T is much more probable that the es
tate will be held together than if i
were necessary to authorize a forcet
sale to distribute the proceeds anon!
the heirs.
The corporation serves another func
ton in the case where individuals OBJ
llgate themselves to buy land unde
contract. 1t makes the obligation les
generous when the individual is backed
by the corporation.
While another function is the semi
secrecy with which deals may be FLEE
N the name of corporation instead Of
an individual, the chief advantage O.
the corporation seems to be based o,
me old adage that Up union there il
strength" 1t is the means of holdins
Ifhe wealth of family together in castt
,pf the death Of the head, instead of Der
hitting the, estate to be dissipated il
legal wrangles. -
! STEEL FRAME COMPLETED
- Security Bank Building Will Soon r.