People who own real estate sometimes transfer title to the property to a business entity or use a business to buy the property in the entity's name to manage legal liability and decrease tax obligations. Only businesses that are legally classified as independent entities can hold title to real estate in the name of the business, rather than in the name of the person making the purchase.

Sole Proprietorship

A sole proprietorship is a business activity that a single owner runs under his own name and assurance that he will be held personally responsible for business matters. Legally, the business operates as an alternate aspect of the owner's individual identity and not as a separate or independent business entity.

Independent Entities

An independent business entity, like a corporation, must file formation paperwork with a state agency. Once the state approves the formation of an independent entity, it has an existence that is separate from its owners. State law gives the entity many of the same powers and authority as an individual, including the right to hold title to real property under the business name specified in the entity's formation paperwork.

Disregarded Entities

A sole proprietorship does not file formation paperwork to come into existence, so it is not a business entity that exists separate from its owner. Consequently, all assets and liabilities that are part of operating the business are in the owner's name. The owner merely assigns an asset to the business, but that assignment does not change the legal status of the asset as the owner's personal property. The situation is the same with debts and other obligations. An owner may take out a loan for the business, but the debt instrument would name the owner as the party responsible for paying the loan back, not the business.


A sole proprietor can use an assumed business name, also known as a "doing business as" or DBA, to run the business, but any legal transaction would still require the legal name of the owner as the ultimate responsible party. Whether the owner uses his own name or a DBA to run the business, the business itself cannot hold title to real estate. Any real estate purchased while the business is organized as a sole proprietorship would belong to the owner personally.

If the owner wants to separate a piece of property from his personal assets and assign title to a business, he would have to convert the sole proprietorship into an entity type that can hold title to the property in its own name, such as a corporation or a limited liability company.