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).
