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Limited Liability Company (LLC Formation)

All though the LLC is not a corporation, it provides many of the same benefits as a corporation. This is an option that is often attractive to small businesses because it provides the limited liability benefits of a corporation with the "pass-through" taxation of a sole proprietorship or partnership. In addition, unlike a corporation, with the proper articles of organization and/or operating agreement a member of an LLC may have the ability to control other members' ability to transfer ownership by voting power of their membership. Nevada LLC Formation is a similar process to Nevada incorporation except for the filing of the articles of organization verses the articles of incorporation. A Nevada LLC offers the same level of asset protection as a Nevada corporation. Red Rock Corporate Solutions’ corporate consultants offer corporate structuring advice to determine whether you need an LLC or if you need to incorporate with an S or C.

Corporate Structure
Members - An LLC is owned by its members: They are like shareholders/stockholders in a corporation. Unlike S corporations, which are limited to 35 stockholders/Shareholders, the LLC may contain an unlimited amount of members. Some states even allow one member to own the LLC. The jury is still out as how this will be taxed by the IRS. It is best to stick with a two-member LLC.

Managers - All members of an LLC can manage the business; it can be delegated to all members, or it may be to a single manager. A manager may be an individual, a partnership and/or a single corporation but in some states, like Nevada, even a separate LLC. Managers may appoint officers, but aren't required to do this. The Articles of Organization would specify the scope of the manager's authority, if any.

LLC Paperwork
Articles of Organization - Articles of Organization are like the Articles of Incorporation of a corporation and Certificate of Limited Partnership, and play a key role in your corporate structure: they are filed with the state. They usually include:
    • The name of the LLC
    • The county where its principle place of business is to be located
    • The date the LLC will be dissolved (if the business is not perpetual, Nevada allows for perpetual LLC's most states do not)

Operating Agreement - The operating agreement establishes the rules for the operations of the Limited Liability Company. It is similar to the bylaws of a corporation and the partnership agreement of the partnership. The operating agreement controls things such as profit and loss and how management powers are divided up with members or managers. It is recommended to have an operating agreement because it is always smoother to have decisions like distribution of profits put in writing before the LLC can get started. Unless the operating agreement says otherwise the operating agreement can only be amended with the written consent of all members.

Certificates of Ownership - This is the stock of the LLC and indicates who the owners are. (Stockholders/ shareholders)

Red Rock Corporate Solutions specialists can help you with the proper structuring with your Nevada incorporation or LLC formation so that your business has the best possible asset protection, tax savings, and privacy available. We can help you to be in compliance with the corporate credit bureaus so that you can build your business credit without creditors requiring personal guarantees on loans and lines of credit. Much of this is dependant on the proper incorporation structuring when you incorporate or form your LLC (Limited Liability Company).