Limited Liability Company Agreements

A limited liability company, commonly called an LLC is aare advisable to be drafted are Articles of
business organization that is a hybrid betweenOrganization and the Operating Agreement. When
partnership or sole proprietorship and corporation. Likeplanning to set up a limited liability company, articles of
owners of partnerships or sole proprietorships, LLCorganization have to be filed with the Secretary of
owners account for business profits or losses on theirState and the required fee has to be paid. Articles
personal income tax returns and the LLC itself is not amay be prepared by a lawyer or filed by the individual
separate taxable entity. Like in a corporation, in LLC, allor the group interested in starting a LLC. Although in
owners are protected from personal liability in case ofmany states it is not required to draft an operating
business debts and claims. This feature is known asagreement, it is advisable. Every LLC member's
"limited liability." This means that if the business owesdistributive share, that is share of profits and losses, is
money or faces a court case for any reason, only theset out in the LLC operating agreement.
assets of the business itself are at risk. CreditorsThe LLC Operating Agreement may range from 12 to
usually cannot reach the personal assets of the LLC16 pages in length depending on its complexity, and
owners, such as a house or car. For these reasons,contains information regarding the company's name
many say that LLC combines the best features ofand address, registered agent information, name and
both the partnership and corporate business structures.address of each LLC member, items contributed by
Forming a Limited Liability Company may not be aseach member, date of company dissolution,
simple as a sole proprietorship, however, the processappointment of LLC officers, accounting method, and
is less than a corporation. The main documents thatLLC management structure and operation.