Special types of corps and LLCs Flashcards
Closely held corps
Only a few SHS, not publicly traded and more relaxed style of governance
Foreign Corp
Incorporated in another state, must register with the state of VA to conduct business in VA
Professional Corp
The purpose is statutorily limited to the rendering of a professional service, shareholder must be of the applicable profession
S corp
C avoids double taxation by passing income and expenses through shareholders who are then taxed directly
benefit corp
exists to promote the general public benefit or may specify one of more specific public benefits, formed by including statement in articles that identifies C as a benefit C
Nonstock corp
has members other than SHs, members are not entitled to distributions but otherwise have the same rights and restrictions as Shs in stock C,
LLC
enjoys the pass through tax advantage of a partnership and the limited liability of a C
LLC creation
by filing articles of incorporation with SCC
Articles of organization
Must include
1. LLC name
2. Registered agent
3. Registered office, and
4. Business address
Operating agreement
May be adopted by an LLC, governs any or all aspects of LLC affairs, must be initially agreed by all members, does not need to be in writing
Membership
new members of the LLC need the consent of a majority of managers in a manager managed llc or the majority of members in an member-managed LLC
Management
direct by members or centralized by managers who can be non members
Liability of members and managers
- Generally not personally liable to third parties solely by reason of being a member or manager
- Manager must act in accordance with good faith business judgment of the best interest of the LLC
Allocation of profits and losses
Unless otherwise stated in the operating agreement, allocations and profits are made according to each member’s LLC contributions
Transfer of membership interest
A transferee only acquires the transferor’s rights to share in the LLC’s profits and losses and receive distributions
