limited liability Wex LII Legal Information Institute

The LLC offers a number of advantages over subchapter S corporations. For example, while S corporations can issue only one class of the company stock, LLCs can offer several different classes with different rights. In addition, S corporations are limited to a maximum of 75 individual shareholders (who must be U.S. residents), whereas an unlimited number of individuals, corporations, and partnerships may participate in an LLC. A professional limited liability company is a limited liability company organized to provide professional services in industries that require a state license in order to practice.

• A PLLC is formed by filingArticles of Organizationpursuant to Section 1203 of the Limited Liability Company Law.
• NRS 86.243Denial of right to obtain or examine records; action to enforce right to obtain or examine records; defense to action for penalties or damages; authority of court to compel production of records.
• An annual list for a foreign limited-liability company not in default which is received by the Secretary of State more than 90 days before its due date shall be deemed an amended list for the previous year and does not satisfy the requirements of this section for the year to which the due date is applicable.
• Limited liability company liable for member’s or manager’s actionable conduct.
• A good liability insurance policy can shield your personal assets when limited liability protection does not.

A limited liability company using a trade name in the transaction of business must file a Trade Name Registration with the Secretary of State. A trade name is a name other than the limited liability company name. A limited liability company may be organized to transact any business except banking and insurance . An insurance agency selling insurance products may be formed as a limited liability company.

Disadvantages of an LLC

LLCs are also the most common legal entity used to own rental and commercial property. An LLC formation limits your personal liability and legally separates you from your business. This portion of the site is for informational purposes only. The statements and opinions are the expression of the author, not LegalZoom, and have not been evaluated by LegalZoom for accuracy, completeness, or changes in the law.

Limited liability companies benefit from the flexibility and flow-through taxation of partnerships and sole proprietorships, while maintaining the limited liability status of corporations. Before January 1, 2001, this chapter governs only a foreign limited liability company which applies for a certificate of authority to transact business in this State after the effective date of this chapter, or which first transacts business in this State after the effective date of this chapter. This section does not apply in determining the contacts or activities that may subject a foreign limited liability company to service of process, taxation, or regulation under any other law of this State. A foreign limited liability company shall deliver with the completed application a certificate of existence or a record of similar import authenticated by the Secretary of State or other official having custody of company records in the State or country under whose law it is organized. If a limited liability company that owns real property in South Carolina is converted to a partnership, the newly-named partnership must file a notice of that name change in the office of the register of deeds of the county in South Carolina in which the real property is located.

What Are the Benefits of an LLC?

The district attorney of the county where the foreign limited-liability company has its principal place of business or the Attorney General may institute and prosecute the appropriate proceedings to recover the fine. If the district attorney or the Attorney General prevails in a proceeding to recover the fine described in subsection 1, the district attorney or the Attorney General is entitled to recover the costs of the proceeding, including, without limitation, the cost of any investigation and reasonable attorney’s fees. A cancellation pursuant to this section does not terminate the authority of the Secretary of State to accept service of process on the foreign limited-liability company with respect to causes of action arising from the transaction of business in this State by the foreign limited-liability company.

“Manager” or “managers” means a person or persons designated by the members of a limited liability company to manage the limited liability company as provided in its articles of organization. “Limited liability company” or “domestic limited liability company” means an entity that is an unincorporated association having one or more members that is organized and existing under this Chapter. No limited liability company organized under this Chapter shall be deemed, described as, or referred to as an incorporated entity, corporation, body corporate, body politic, joint stock company, or joint stock association.

Limitations of an LLC

The renewal application renews the registration for the following calendar year. The LLC members ordinarily are not personally liable for LLC debts and lawsuits. A foreign limited-liability company shall maintain at its principal office in this State or with its custodian of records whose name and street address are available at the company’s registered office a current list of each member and manager. If the Secretary of State finds that an application for registration conforms to law and all requisite fees have been paid, the Secretary of State shall issue a certificate of registration to transact business in this State and mail it to the person who filed the application or the person’s representative.

This provides the company with the option of being treated as a flow-through entity, so long as it does not choose to be treated as a C corporation. Generally, an election specifying an LLC’s classification cannot take effect more than 75 days prior to the date the election is filed, nor can it take effect later than 12 months after the date the election is filed. An LLC may be eligible for late election relief in certain circumstances. See About Form 8832, Entity Classification Election for more information. The legal inadequacies regarding extended partnerships and unincorporated joint-stock companies and the need for larger and larger amounts of capital gradually led to the acceptance of the corporate form of enterprise.

A limited-liability Limited Liability may, but is not required to, adopt an operating agreement. An operating agreement may be adopted only by the unanimous vote or unanimous written consent of the members, which may be in any tangible or electronic format, or by the sole member. Unless otherwise provided in the operating agreement, amendments to the agreement may be adopted only by the unanimous vote or unanimous written consent of the persons who are members at the time of amendment. A foreign limited liability company is one that has filed articles of organization under laws other than the laws of North Dakota.

The failure of a foreign limited liability company to have a certificate of authority to transact business in this State does not impair the validity of a contract or act of the company or prevent the foreign limited liability company from defending an action or proceeding in this State. Applying for a certificate of authority is not an admission of tax liability. If a limited liability company that owns real property in South Carolina is converted to a limited partnership, the newly-named limited partnership must file a notice of that name change in the office of the register of deeds of the county in South Carolina in which the real property is located. If there is no office in that county, a notice of name change must be filed with the clerk of court of the county in which that real property is located.