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Forming an LLC Online

Articles of organization must be filed with the appropriate state to form an LLC. While an operating agreement does not have to be filed, it is an important document that should set forth the members’ rights and responsibilities, their share of ownership, their voting rights, their shares of profits and losses and their distribution rights, all of which can be different and without regard to their capital contribution. One or more managers make management decisions and “run the business” for the inactive members. As its name implies, an LLC provides the same limited liability for its members as does a corporation. Members enjoy limited liability for the debts, obligations and liabilities incurred by the business as well as liability stemming from possible legal action...

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Highlights of a Limited Liability Corporation

  • Official documents, typically called a Certificate of Formation or Articles of Organizatioin, must be filed with the appropriate state in order to form a C Corporation
  • State filing fees must be paid
  • Most states permit LLC’s to also file an operating agreement, allowing for great flexibility, setting forth the relationships between its members and its internal operation
  • An LLC can be managed by its members or by managers
  • An LLC is considered by the law to be an individual entity
  • Legally, an LLC is a separate entity from its members and managers
  • An LLC can generally conduct any lawful business
  • Most states permit 1 member LLC’s while none limits the number of members
  • Corporations, partnerships and trusts can be members of an LLC
  • Members and managers normally enjoy the same limited liability as do the shareholders, directors and officers of a corporation and can lose no more than the amount of their contribution to the LLC
  • Protection of members’ personal assets is a major advantage of an LLC
  • As with corporations, members and managers can be held liable when the LLC has been used to recklessly harmed people or perpetuate a fraud

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