Limited Liability Companies
Most people starting a business face a choice as to how to organize. A Limited Liability Company, like corporations, shields business owners from personal liability for business debts. Thus, a company's creditors generally cannot seek to collect against the owners' personal assets. However, LLC's don't incur the double taxation that applies to regular corporations. Instead, like partnerships and s-corporations, LLC's allow profits and debts to "pass through" to the owners (as K-1 income) for taxation purposes.
Unlike partnerships, LLC's may have a single owner. When there are multiple co-owners, all of the owners of an LLC are protected from personal liability. Contrast this to limited partnerships, in which the limited partners are protected from company liabilities, but general partners are personally responsible for the partnership's debts).
Unlike corporations, LLC's don't require ongoing compliance with formalities (such as annual meetings of shareholders, board of directors, minutes, etc.) in order to maintain the business structure's benefits.
The two biggest advantages LLC's have over a corporations are the flexibility in structuring the ownership and management of the company, and the tax laws for calculating each owner's basis in the company for income tax purposes.
Before you start up a new business, contact the experienced DuPage County business planning attorney Daniel J. Kollias to explore the various structural options available to you, and assess the benefits and drawbacks of each. We can help you choose the best option for your company, prepare an operating agreement, and file the necessary Articles of Organization and other documents required to set up your company.
Operating agreements are similar to partnership agreements: they spell out each owner's rights and duties, each owner's percentage of ownership, and each owner's share of the company's profits. Like shareholder agreements, operating agreements may also set up procedures that would allow the company to continue operating after an owner's death, departure, or disability.
At Kollias & Giese, P.C., we would welcome the opportunity to meet with you and help you decide whether forming an Illinois Limited Liability Company is the best option for your business. If you already have an LLC set up and simply need a lawyer to review or revise your existing, operating agreements and other LLC documents, please call us.
To schedule a free 30-minute consultation, please call us at (630) 407-1200, or fill out and submit our online intake form.