BusLaw11.037 - LLCs Limited Liability Company"LLC A hybrid...

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LLCs Limited Liability Company (“LLC”): A hybrid form of business, which is taxed like a partnership while offering owners the limited liability of a corporation . An LLC is composed of one or more owner(s), called member(s), who must file articles of organization with the appropriate state authority. Some states’ statutes require that an LLC have at least two members; other statutes are silent on the number of members required to form an LLC. An LLC can be owned, in whole or in part, by corporations, partnerships, or foreign investors, and need not be “closely-held” – meaning that it may have unlimited investors . An LLC must include the words “Limited Liability Company” or the initials “LLC” in its business name, as reflected on its articles of organization. Ch. 37: Limited Liability Companies and Special Business Forms - No. 1 Clarkson et al.’s Business Law (11th ed.)
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LLC PROS AND CONS Key Advantages: members enjoy limited personal liability ; LLCs with two or more members may elect to be taxed as a corporation or a partnership ; and flexibility in management and operations. Key Disadvantages: non-uniform state LLC statutes create uncertainty as to personal liability; and lack of case law addressing LLC issues creates uncertainty. Ch. 37: Limited Liability Companies and Special Business Forms - No. 2 Clarkson et al.’s Business Law (11th ed.)
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LLC OPERATION AND MANAGEMENT Operating Agreement: An agreement among the members of an LLC that addresses management, profit-sharing, transfer of ownership, dissolution, and other important issues. The operating agreement may also include provisions
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BusLaw11.037 - LLCs Limited Liability Company"LLC A hybrid...

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