Blog: Choice Of Entity - Limited Liability Companies
November 6, 2014
An individual or group of individuals who are starting a new business should consider forming a legal entity to protect them from most personal liability for business obligations and debts. One versatile type of business entity is the limited liability company. A limited liability company can operate with a single member or multiple members. For tax purposes, a single-member LLC is treated as a sole proprietorship. A multiple-member LLC can be taxed as a partnership or corporation.
Forming a limited liability company requires the new entity to file a certificate of organization with the secretary of state in the state where the entity has its principal place of business. The LLC should also adopt an operating agreement, which sets forth the rules governing the management and operation of the LLC. An LLC can be managed by its members or by selected managers, who are not required to also be members.
This blog post is authored by Jacob Natwick and meant for informational purposes only. It is not meant to provide legal advice in any particular circumstance or factual situation. You should consult with an attorney prior to taking any action regarding the information contained herein.