Chapter17 and 18 - Chapter 17 LLC- Lowered Liability...

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Chapter 17 LLC- Lowered Liability company LLP- Limited Liability Partnership LP- Limited Partnership LLLP- Limited Liability Limited Partnership FLLP- Family Limited Liability Partnership A. What is Lowered Liability Company? A relatively new form of business designed to limit the liability of partners. The LLC is a hybrid form that combines the limited liability aspects of the corporation and the tax advantages of a partnership. They are increasingly becoming an organizational form of choice among businesspersons- a trend encouraged by state statutes permitting their use 1. Have LOWERED LIABILITY COMPANY laws been adopted in all states? LLCs are governed by state LLC statutes. The laws vary from state to state. In order to create more uniformity among the states, in 1995 the National Conference of Commissioners on Uniform State Laws (that’s a bitch of a name, right?) issued the Uniform LLC Act (ULLCA). To date, less than ¼ of the states have adopted it so it still isn’t uniform. Well, that was stupid. Some provisions are common to most state statutes though. 2. How is the citizenship of an LLC determined for purposes of federal court jurisdiction? The federal jurisdiction statute doesn’t mention the state citizenship of partnerships, LLCs, and other unincorporated associations, but the courts have tended to regard these entities as citizens of every state in which their members are citizens. 3. How many members do most states require for a LLC to have? About ¼ of states specifically require LLCs to have at least 2 members, or owners. The rest o the states usually permit 1 member LLCs, though some statutes are silent on the issue. 4. Is flexibility an advantage of an LLC with respect to tax options?
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Chapter17 and 18 - Chapter 17 LLC- Lowered Liability...

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