Business Articles - An LLC Operating Agreement - Getting a Grasp
Why is an LLC a favored business choice? Well, it is often touted as offering the best aspects of the other major business entity choices. It offers the shield from liability that you get with the corporation, but without the administrative requirements. Even better, it offers the tax advantages of filing as a partnership with the IRS, but still offers asset protection whereas a partnership does not. While no business entity is perfect, the LLC certainly has some very strong things going for it.
An LLC is like any other business entity. It is a shell that requires certain documentation that will establish how the company is to function. The Operating Agreement is the major document that does this for the LLC. It serves the same purpose as the bylaws of a corporation, to wit, it sets out how the rights of the member owners, how the entity will be managed and other administrative matters.
Many people form LLCs without having a clue regarding what to do with the Operating Agreement. Some people file the incorporation forms on their own and aren't even aware they need this document. Others use a cheap online service and ignore the blank forms they get from the company. All of this can lead to disaster if the LLC is sued as the lack of an Operating Agreement will more often than not lead to the termination of the asset protection element of the LLC. This means each owner [you] will be personally liable for the debts of the company!
The vast majority of limited liability companies are formed for small businesses. The sad truth is most of these companies can be set aside because the member owners haven't put together the necessary Operating Agreements to make the company legitimate. Instead, they blindly proceed with business completely unaware they are sitting on a time bomb.
Rick Chapo is with SanDiegoBusinessLawFirm.com - providing single member LLC operating agreement and minute solutions to single member California LLCs.
Related Tags: business, choice, agreement, llc, limited liability company, entity, operating agreement
Your Article Search Directory : Find in Articles
Recent articles in this category:
- How to Hire a Personal Injury Attorney Toronto
There is no question that suffering from a personal injury is an incredibly difficult thing to have - Finding the Best Personal Injury Lawyer
Should you be the victim of an accident that just simply was not your fault and you have received an - DUI Perpetrators Must Seek Expert Help
It is obvious, as we progress further into the future, that behavior that puts others at risk is not - To Find the Best New York Attorney Buffalo is Still the Best Choice
If you need an attorney in New York, you would surely have a lot of options. New York has 10 cities - If You Need a Great Wisconsin Attorney Madison is the Way to Go
Are you in need of a great Wisconsin attorney? If you are from Wisconsin and need a great attorney M - What Is The Importance Of An LLP Agreement
An LLP agreement is an important contract, since without such a document the Limited Liability Partn - Personal Injury Lawyers - Knowing If You Are Entitled For a Claim
No doubts accidents do take place; however that does not mean that you should take up the liabilitie - Personal Injury Lawyers - Claiming Compensation For Your Injuries Some Tips
When you are injured, the next thing is you should know what legal rights you have; this will provid - Personal Injury Lawyers Help Victims of Car Accident Claim Financial Damages
People living in Toronto go to work through different modes of transports like trains, buses and car - Personal Injury Lawyers - Get Help at Your Doorstep When Injured
As soon as you are involved in an accident, it is usually quite common for you to be injured maybe i
Most viewed articles in this category:
- Mesothelioma Lawyer - Asbestos Attorney - Mesothelioma Lawsuits & Lung Cancer Information
Mesothelioma is one of the most tragic diseases ever to strike the working man. Due to decades of m - Michigan Personal Injury Lawyer Courts
The Michigan Courts were created by the Constitution of 1963, Article VI, and Section 1, under which - What is Entrapment?
Question: What is entrapment?Criminal Defense Lawyer: Entrapment is a defense raised by a defendan - Top 10 Tips On How To Win Your Road Traffic Accident Case
If you happen to be pursuing this thing right now then here are the top ten tips on how to win your - Agency Law
Agency Law The origins of the doctrine of necessitous intervention by someone who is in a legal rel - Procedure Of DWI In U.S.A.
ALR (Administrative License Revocation) A Program to suspend the driving license Of Drivers Which a - Mesothelioma Lawsuits Surging in United States
Mesothelioma is a cancerous disease where malignant cells develop in the lining of the chest or the - Forensic DNA Testing
Forensics is defined as the study of evidence found at a crime scene and used in a court of law. For - Arizona Drunk Driving Law, Az Drunk Driving Law & Arizona Drunk Driving Charges
Arizona drunk driving is one of the most common and deadly mistakes in Arizona while driving. Defens - Worried About the Fair Debt Collection Practices Act?
Do you work for a financial institution that collects debts? If so, do you know whether the Fair De