Limited Liability Company (LLC)

A limited liability company or LLC is a new and very popular business entity. The limited liability company (LLC) is owned by partners. Like its name suggests, partners of limited liability company (LLC) have limited liabilities. Partners of an LLC are called members of the limited liability company (LLC). Limited Liability Companies (LLCs) are often used in asset protection in most key asset protection strategies.

Forming a Limited Liability Company (LLC) - explanation of an LLC

The LLC requires the filing of an article of organization or article of incorporation with secretary of state of the state the Limited Liability Companies (LLC) is incorporated. Many rules for forming a limited liability company (LLC) are similar to forming a corporation such as a C corporation or an S corporation.

Limited liability in limited liability company (LLC)

All members of a limited liability company (LLC)are not liable beyond their contributions to the limited liability company (LLC). This makes an LLC much more attractive as a business entity than a limited partnership. All members of a limited liability company (LLC) can participate in the management of the limited liability company (LLC) without personal liability of the limited liability company (LLC)'s debts or lawsuits against the company.

Who can run the limited liability company (LLC)?

The limited liability company (LLC) can be run by its members or by a manager of the limited liability company (LLC). The manager of the limited liability company (LLC) can be an individual who can be but does not have to be a member of the limited liability company (LLC), or an entity such as a corporation or another limited liability company (LLC).

Manager managed limited liability company (LLC)

When a limited liability company (LLC) is manager managed, it is similar to a limited partnership in the way the limited liability company (LLC) operates. The manager of the limited liability company (LLC) makes all the day to day decisions. However, the manager of the limited liability company (LLC) is not personally liable for the LLC's debts or lawsuits.

When a limited liability company (LLC) is member managed, all members of the limited liability company (LLC) can participate in the management and control of the limited liability company (LLC).  A member managed LLC is very similar to a general partnership except that the members are not liable for the debts or liabilities of the company.

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