Do You Understand Limited Liability Companies (“LLCs”)?

Posted in Uncategorized at 4:42 PM by Ava M. Dixon

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Everyday many new companies are established as a Limited Liability Company (also known as “LLC”).  However, very few business owners have a complete understanding about LLCs.  What are the benefits of being an LLC and what type of business enterprises should consider an LLC?

 Many business owners hold the false perception that once the Articles of Organization has been filed with the State Corporation Commissioner that the business owner(s) are shielded from the company’s debts and losses, like a corporation.  While being able to take advantage of the tax savings available to a partnership.  A number of factors about the company and how the company operates must be properly taken into consideration (i.e., management structure, transferability of member interest, dissolution, etc.).  These details are usually outlined in the Operating Agreement.  The Operating Agreement does not need to be filed with the State Corporate Commissioner, however every LLC should have one in place. 

 Think about the following questions – Is a member liable for a debt/lose acquired by the company if they were the guarantor OR Was the LLC formed in such of a way that the Internal Revenue Service might view it as a corporation OR Does the company provide professional services (i.e., attorney, doctor, etc.)?  If you have difficulty answering any of these questions, I recommend speaking with an attorney or accountant.

 The purpose of this article is to provide introductory information about LLCs.  A complete understanding about LLCs cannot be addresses in just one article due to its complexity.  Since this area of law can be very complex, it may be necessary to consult an attorney or accountant to ensure complete protection.  Accordingly, nothing herein is to be interpreted as legal advice.  We are not attorneys and cannot and do not give legal advice.  Please contact your local bar association if you need assistance locating an attorney.

Please share your knowledge about LLCs or your experiences in connection with an LLC.

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