The limited liability company (LLC) developed as a variation/combination of the corporate and partnership forms in order to provide a flexible alternative to the existing options (e.g., S Corporations, general partnerships, and limited partnerships.). LLCs are creatures of statute, and must be formed and organized in accordance with the procedure set out in the applicable state law.

Initial Considerations:

• Regulatory provisions relating to the relationship between the company and the state, including requirements with respect to formation and dissolution, purposes and powers, and fees;
  
  
• Public protection provisions relating to the relationship between the company and third parties, including liability of the members (and, in some cases, the managers) and authority of members (and, in some cases, the managers) to bind the company to third parties; and
  
  
• Contract provisions relating to the relationship between and among the company and its members, which apply only if an issue arises that has not been resolved by an agreement set forth in the articles of organization or the operating agreement.

Management Types of LLCs

1. Member-Managed LLCs
   
   There are two types of member-managed LLCs.
   1. A "member-managed," "at-will," company, which is similar to a general partnership in that it is managed by the owners and subject to termination upon the occurrence of events similar to those which will cause dissolution of a general partnership.

   2. A "member-managed," "term," company, which is similar to a statutory close corporation in that it is managed by the owners and extends for an agreed duration, even if one or more members should leave the business prior to the end of the term.
   
   
   
2. Manager-Managed LLCs
   
   A "manager-managed" company, which can also be either "at-will" or "term," is similar to a regular corporation or a limited partnership in that it allows for centralized management of the business by managers selected by the owners.
   
   
3. Single-Member LLCs
   
   A number of states permit the use of "single-member" LLCs. As the description implies, a single-member LLC has just one owner and allows the owner to operate the business in the same way as a sole proprietorship, but with limitations on personal liability which are not available to proprietors.
   1. A single-member LLC is operated under an agreement between the LLC and the member.
      
      
   2. The owner of a single-member LLC is taxed in the same way as a sole proprietor.
      
      
   3. While single-member LLCs are generally managed by the member-owner, it is possible to provide for designation of one or more managers to assist in the operation of the business.
      
      
   4. An interesting use of a single-member LLC is when a corporate or other non-individual entity forms an LLC to hold specific assets and insulate the activities of those assets from other aspects of the member's business.

AGREEMENTS, DOCUMENTS & FORMS:

Manager-Managed Limited Liability Company Operating Agreement
Member-Managed Limited Liability Company Operating Agreement
New Limited Liability Company Questionnaire
Single-Member Limited Liability Company Operating Agreement
Client Letter Summarizing LLC Characteristics
Client Letter Summarizing LLC Formation
Client Letter Summarizing LLC Operation
Minutes of Organizational Meeting of Managers
Basic Operating Agreement
Single-Member LLC Operating Agreement for Pension Fund Investments
Letter to Client Regarding Operation of Member-Managed LLC
Client Letter to Owner of Single-Member Limited Liability Company