articleaddict.com has a wide variety of articles for you to read.
Search:

Home | Business


Limited Liability Company – An Introduction

By: Mira Williams

As the name suggests, a limited liability company affords “limited liability” to the owners and the ’pass-through’ income tax benefits for the primary partners. By “limited liability”, it is implied that the partners or owners of the LLC do not have to share the complete responsibility for all the debts and other transactions of the company. Such setups are usually more beneficial for enterprises that have single proprietors and with a small scale transaction and turnover.

Following are the Common Elements of a Typical LLC-

LLC Members- Every limited liability company has to have a minimum of one member without which the company cannot exist. There could be more than one member and in this case they are the partners in the company, and hold certain stake as per their contribution to investments. The members can be real people or even legal entities (one or more) like corporations or other business entities.

Partner Interests- Every partner has a definite interest stake in the LLC and this is referred to as the “membership interest” of the particular partner. The tune of the membership interest is directly a function of the investment of that particular partner in the LLC.

Management of a LLC- A LLC is managed by its members. The degree and limitations of the management domains for members are predefined, in accordance with the volume of “membership interest”, and as per the operating agreement.
The Operating Agreement- This is essentially the constitution of the LLC that documents the agreed member principles. The operating agreement is approved and accepted by all the members as it allocates vesting of particular rights, liabilities, and other such functions to individual members. The operating agreement holds a very important place. It is the rule book, and if not crafted with due care and diligence, could possibly leave out exploitable loopholes.
Registration of LLC- A LLC cannot be said to exist and be legally valid as long as it unregistered. The registration process primarily involves acknowledgment of the LLC by an appropriate and competent government authority. The requisite procedure in this regard differs slightly in every state. However, it will essentially involve filing the Articles of Organization with the concerned government agency for authentication and validation. You can find more information about the formal registration procedure on the website of the Secretary of State for your region.
Perhaps, the most advantageous part of the LLC structure is its flexibility. Once you have your LLC in place duly registered, you can make changes as are necessary. The ubiquitous phrase “..unless otherwise stated”, is invariably found in all the LLC operating agreements and can be put to good use as per requirements.

Article Source: http://articleaddict.com

IncFile offers expedited filing services to clients that do not want to wait for the normal state processing times. Our expedited service will ensure that your filing is formed by the state in the shortest possible time: Start an LLC, Register an LLC, File an LLC, Form an LLC.

Please Rate this Article

 

Not yet Rated

Click the XML Icon Above to Receive Business Articles Via RSS!
Additional Articles From - Home | Business
Sign Up for a free account or learn more.
Submit Articles
Member Login
Top Authors
Most Popular Articles
Submission Guidelines
Article RSS Feeds
New Stuff
About Us
Free Link Directory
Contact Us
Privacy Policy
Terms of Service
Sitemap
rent this Ad space monthly.

Powered by Article Dashboard