LLC Flashcards
what is an LLC
combo PS and corp
- taxed like a PS
- offers LLC owners same limited liability benefits that a SH of a corp enjoys
- can be run either like a corp or a PS
LLC fomation
file certificate or orgaization with sec. of state and at least one member
requirements in certificate
- name of LLC with LLC after it
- address of LLCs registered office
- name and address of LLC’s registered agent
when can corporate veil be pierced
to reach. personal assets to satisfy LLC obligations
fiduciary duties owed
duties of care and loyalty
member-managed LLC
members owe to each other and LLC duties of care and loyalty
manager-managed LLC
only managers subj to duties of care and loyalty and only members can authorize or ratify actions that would otherwise violate duty of loyalty
list (5)
LLC dissolution
- event or circumstance of operating agreement that causes dissolution
- consent of all members
- 90 days pass and LLC has no members
- judicial dissolution
- administrative dissolution - fail to submit fees or annual report
LLC vs corp taxation
LLC - tax on income
corp - double taxation; corp pays taxes on it s income, SH pay taxes on their income
rights to information member-managed LLC
members have right to inspect and LLC members must automatically share info
rights to information manager-managed LLC
managers have right into info and to inspect
what happens when a member is personally injured by their LLC
- can bring direct personal action against LLC
- can bring derivative action on behalf of LLC if making a demand on other members or managers unless demand is futile
- derivative action can only be maintained by a person who is a member at time action is commenced** and **remains a member while the action continues
