| Business and Corporate Law
> Limited Liability Company Limited Liability Company
What is
a limited liability company? A limited liability company ("LLC")
combines the corporate aspect of limited liability for its members,
regardless of the extent to which they take part in the business,
with the tax advantages of a partnership. Instead of shareholders
as in a corporation or partners in a general or limited partnership,
the owners of an LLC are called "members". A member may
be any "person" which includes and individual, partnership,
limited partnership, trust, estate, LLC, foreign LLC, domestic or
foreign corporaiton, unincorporated association or other entity.
How do
you form a limited liability company?  To form an LLC in North Carolina,
strict compliance with state law is required. Generally, these requirements
include preparing and filing of articles
of organization, conducting
an organizational meeting, establishing the
books and records of the LLC, preparing and adopting an
operating agreement, issuing ownership interests in the LLC, and
filing of any required reports with
appropriate federal, state, and local offices. There is no requirement
that the operating agreement be in writing, however, without a written
agreement, the laws of the state of formation will control and govern.
How is a limited liability company managed?
An LLC may elect to either be managed by all
of its members or by designated managers. What liability
do the members of a limited liability company have? A member or a manager of an LLC
is generally not personally liable for the debts and obligations
of the LLC beyond his or her contribution. However, a member or
a manager may become personally liable as a result of his or her
own acts or conduct, or if he or she personally guarantees debts
or obligations of the LLC.
How is a limited liability company taxed?
The LLC may elect to be treated
as either a corporation or partnership for federal income tax purposes. LLCs can have several classes of equity and
debt thus providing greater flexibility to its members in the structuring
of their financial interests. What are
Professional Limited Liability Companies? Certain groups of professionals
may engage in professional services through a professional limited
liability company ("PLLC") subject to the same terms and
conditions for the rendering of professional services through a
professional corporation under North Carolina General Statutes Chapter
55B, the Professional Corporation Act.
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