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Limited Liability Companies

The limited liability company (“LLC”) is quickly becoming the most popular type of business entity due to its flexibility. An LLC often combines the best of both partnerships and corporations.

Liability Protection

If organized and operated properly, an LLC not only protects the assets of its owners from creditors of the business but may also protects the assets of the business from creditors of the owners. LLCs generally require less formalities than a corporation. The owners of an LLC are called members.

Limited Liability Company Taxation

Limited Liability Company (LLC)One of the most important benefits of an LLC is the flexibility the Internal Revenue Code permits when it comes to how an LLC will be taxed. An LLC with a single owner may be taxed as a disregarded entity, a corporation, or an s-corporation. An LLC with two or more members may be taxed as a partnership, corporation, or an s-corporation.

If an LLC is taxed as a partnership the LLC operating agreement, which is the governing document of an LLC, can be drafting to allow company profits and losses to be shared any way in which the members agree. Elliot frequently consults on complex income and loss allocation issues and has the knowledge to design and draft agreements to meet the most multifaceted arrangements between the members.

Limited Liability Company Management

LLC are generally run by a Manager or Managers of the Company, who can also be members of the LLC. However, each company’s needs and goals are different and sometimes the management structure also needs to be customized. Elliot works hard to find solutions to complex management issues and has drafted complex agreements to meet many unique circumstances.

Limited Liability Company Acquisitionsation

The outcome of a sale or purchase of a limited liability company can be very different depending on how a target company is organized and operated.  In fact, there are important steps that must be followed to ensure a proper result. Some of these steps include a letter of intent, tax planning, due diligence, a properly drafted purchase agreement, and often an amount withheld in escrow for a period of time.

Some of the documents Elliot regularly drafts for limited liability companies include certificates of formation to register the entity with the state, operating agreements to define the rights and responsibilities of the members and managers, annual and special meeting minutes, loan documents, capital contribution documents, asset purchase agreements, and LLC purchase agreements.

Elliot Smith is a licensed attorney and certified public accountant that can take care of your business needs. Whether you’re opening a new business, incorporating, or looking for tax services, Elliot Smith has the resources to serve you.