Limited Liability Company FAQ

What is a Limited Liability Company?

A Limited Liability Company is a business structure generally regulated on a state-to-state basis. In a Limited Liability Company, the owners (often called “members”) will indeed limit their liabilities by maintaining the LLC as a separate legal entity. This is one reason Limited Liability Companies are popular amongst real estate owners and other property owners that want a straightforward business structure.

Additionally, a Limited Liability Company’s structure allows for “pass-through” taxation, which is a great strategy for avoiding double taxation – in essence, a partner in an LLC only has to pay taxes on their profits once.

What kind of forms do I need to start a Limited Liability Company?

The most important form for you to use is Articles of Organization, a form that should be customized to suit the needs of your individual state – LLC’s, after all, are highly regulated by each state and therefore the rules of each state vary. The actual Articles of Organization form is really all you legally need to start a Limited Liability Company. However, using an Articles of Organization kit complete with checklists and questionnaires can help you understand everything you need in order to get the LLC started.

What is an LLC’s Operating Agreement?

This agreement – between the founding members of the LLC – lays out the structure of the company, its name, how the company will be managed, etc. Essentially, the Operating Agreement presents the structure and strategy of the LLC. It also presents the details of how payments in the LLC are handled.

These Operating Agreements include provisions such as:

• Company Manager: Determining who is the manager of the company is important, and will have to be laid out here.
• Name of the Company: Quite simply, what is the company going to be called?
• Rights and Duties: Not only are the rights of the members listed here, but their duties – such as making member meetings – will also be included.
• Contributions to Capital and Capital Accounts: This provision records what each member has contributed to the capital at the beginning of the company and describes how the accounts will then be maintained.

It’s important to remember that both the Articles of Organization and Operating Agreement, while foundational, can be amended, as you’ll see in the answer below.

What if I need to make changes to an LLC down the line?

After filing your LLC and filing the Articles of Organization, you may find it necessary to change the basic structure of the company. This is much easier than you may think because it’s a common practice.

There are essentially two types of amendments you’ll need to file: Articles of Organization Amendments and Operating Agreement Amendments. Generally, you may need to make changes to both if you’re making a major shift in your LLC. It’s important to frequently refer back to these documents from time to time to make sure that they are up to date. If not, they should be amended to reflect the current situation as soon as possible.

What is a Voters Agreement?

This is an agreement between the LLC itself as an entity and the shareholders of an LLC – i.e. those who have a vote in how the company will make a decision. These agreements are typically not required for most basic decisions, as those can be left to the manager who’s already been named in the foundational documents of the LLC. However, major decisions may come to a vote, in which case these agreements will be crucial.

How do I hold member meetings?

In the Articles of Organization and Operating Agreement, you’ll likely state that your LLC will hold annual meetings. Holding these meetings is easy once you have the right documents to keep track of a meeting’s checklist and minutes. Storing away these meeting documents will be important in showing that the responsibility of holding meetings for the LLC have been met, as per the terms of the documents that established the LLC itself.

What kind of fees can I expect for filing an LLC?

Fees vary, not only on a state-to-state basis, but on the charges you’ll receive if you go through an attorney or accountant. If you’re interested in saving the most amount of money possible, the best way to go about it is to register your LLC through state-specific legal forms that have been attorney-reviewed and are ready for you to fill out. You can also download “kits” that will take you through the process for a fee much less than what an attorney will typically charge you.

Why should I form an LLC as opposed to another business structure?

The LLC structure is ideal for many, but that does not mean it’s necessarily the right business structure for your enterprise. Other companies run as sole proprietorships, for example, in order to keep the structure simple. Some companies file as S-Corporations or C-Corporations.

The tax benefits of an LLC are obvious (avoiding double taxation is a high priority for those who want to earn their primary income from an LLC they’re a member of) as are the liability protections that come with the structure. Most often, an LLC is a quick and easy way to form an organization that protects your property and liability and shields you from direct financial risk in your financial endeavors.

What do I need to know before I form an LLC?

You should have a full understanding of what an LLC is, what the structure will be like, and how the LLC will run. You can use a Pre-Organization Kit if you’re lost at any point in this process; it will help guide you through the process of forming an LLC and explain to you what your responsibilities are.

How do I get named the manager of an LLC?

Because an LLC is often a partnership between founding members, you’ll simply need the approval of the other members to be the manager of your LLC. You’ll also want to make sure that you are registered as the manager in the founding documents of your LLC.

Limited Liability Co.

• Limited Liability Company Forms Combo Package

  Best Value - Limited Liability Company Forms Combo Package for use in all states. Save money with this convenient combo packages containing the most used forms and agreements needed to start and operate an LLC. Avoid headaches and save time by always having the right form at your disposal.

• Articles of Organization

  This attorney-prepared Articles of Organization form is specifically designed for use by a Limited Liability Company, providing your LLC everything you will need to prepare, draft and successfully file your Articles of Organization. This legal document also includes guidelines and can be tailored to your unique situation, as well as detailing those matters that are relevant to the public registration of the LLC. Available to download immediately and for use in all states.

• Member Meetings

  Popular - These attorney-prepared Member Meetings Kits are specifically designed for use by LLC's, providing guidelines and forms related to the meetings. This Kits contain instructions and model forms for both first meetings and annual meetings thereafter, ensuring compliance with governing laws and minimizing future problems. Available to download immediately.

• Pre-Organization Kits

  Popular - LLC Pre-Organization Kit to help you set up an LLC in all states. This clear and concise kit has been prepared by experienced attorneys to help you avoid mistakes and misunderstandings before it becomes a serious problem to your business. The checklists and worksheets contained in this kit will take you through the steps you will need to follow, one by one, to ensure compliance with governing laws and maximize the success for your LLC.

• Amendments

  In the formation of a limited liability company, you might find the need to amend the governing formation documents. Formation documents are often crucial to the success of a company, and must be complaint with governing law. This attorney-prepared kit includes various key amendments, including Amendments to the Articles of Organization. The Articles of Organization is the central legal document for any limited liability company, outlining the basic structure of the company and matters relevant to the public registration of the company. Also included in this kit, Amendments of the Operating Agreement, governing the legally compliant method in which a company can amend or alter certain portions of the Operating Agreement. These legal documents are available to download immediately for use in all states.

• Operating Agreements

  Carefully drafted by experienced attorneys, this Operating Agreement form is designed for a single or multi-member Limited Liability Company. This legal document contains the instructions and model form to effectively organize your limited liability company while ensuring compliance with governing laws.

• Termination of Limited Liability Company

  This attorney-prepared Termination of Limited Liability Company Kit is specifically designed to help you navigate one of the most difficult business situations to confront. This Kit contains guidelines that will help ensure that the termination of the limited liability company proceeds as amicably as possible, including worksheet and sample termination agreement. Available to download immediately.

• Voters Agreements

  Voters Agreement between a limited liability company and the holders of the company's shares. This agreement effectively sets forth that the shareholders agree to vote their entire ownership percentage with regard to any transactions contemplated by the company. Take advantage of an attorney's expertise at a fraction of the cost when you purchase this form.