A Limited Liability Company is not a corporation, but it offers many of the same advantages. Many small business owners and entrepreneurs prefer this type of entity because it combines the limited liability protection of a corporation with the “pass through”" taxation of a sole proprietorship or partnership.
Articles of Organization are the main filing document which begins the LLC’s existence under state law. Once filed, the LLC comes into existence.
Generally, most jurisdictions require Articles of Organization to contain, at a minimum, information about the following:
- Corporate Name *
- Business address
- Name and address of the Registered Agent.
- Name and Address of initial Members.
* It must include a name ending such as “Limited Liability Company “, “Limited Company”, “Limited” or its abbreviations, “LLC”, “LC” or “Ltd” (name endings vary state by state)
LLC can elect to be taxed like partnerships, only at the individual level when profits are paid as dividends. This yields a considerable advantage over C corporations, which are subject to double-taxation – once at the corporate level, and again at the individual level when profits are paid as dividends to the shareholders.
A LLC is owned by its members. A LLC may be managed by its members (owners) or by a designated manager. If the members choose, they may elect a manager to act in a capacity similar to a corporation’s board of the affairs of the LLC.
Member management, however is the normal default rule of state law.
Frequently Asked Questions about LLC
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