Limited Liability Companies
A Limited Liability Company (or, “LLC”) is a hybrid entity that contains favorable aspects of both corporations and partnerships. The fundamental characteristic that an LLC shares with corporations is that statutes in the various states protect the LLC owners from the debts and liabilities of the company. Unlike a corporation, an LLC has the option of pass-through income taxation similar to a partnership, thus avoiding double-taxation.
At first glance, setting up an LLC appears simple. First, the owner or owners must select a name unique to the jurisdiction they are entering. Second, designate the registered agent who will receive notices and subpoenas on behalf of the LLC. Third, prepare and file Articles of Organization with the Secretary of State and pay the required fees. Thereafter, the Initial List of Managers must be filed, and annual administration must be performed to maintain the entities active status.
What the simple three-step process above does not show are the various planning and structuring opportunities available to LLC owners. Setting up an LLC without an attorney is risky because State statutes and Federal tax code have default rules for an LLC which can disadvantage the owners. Gerrard Cox Larsen can advise you regarding establishing an LLC and preparing an Operating Agreement that is customized to the your specific needs. Such options include:
Member-Managed versus Manager-Managed,
Voting Shares versus Non-Voting Shares,
Foreign LLC versus Domestic LLC,
Tax Considerations (Disregarded Entity, Partnership, C Corporation, S Corporation),
Estate and Gift Planning with an LLC, and
LLC Dissolution.
At Gerrard Cox Larsen, we have advised our clients in thousands of matters involving the planning, setup, and administration of LLCs. If you are interested in the protection and flexibility an LLC can offer, or require assistance with an existing LLC, call us to schedule a consultation.