Limited Liability Companies
Comparatively, Limited Liability Companies are a new form of corporate entity. An LLC offers liability protection to its owners ("Members"), is similar to a corporation, and provides for great flexibility in matters of taxation, management and ownership. The LLC owner risks only their investment in the business. Additional personal assets are not at risk, unless the owner has personally guaranteed the debt.
In Georgia, the LLC offers many options as to organization and control. With certain exceptions, the Operating Agreement may be drafted to suit your particular needs and goals. The LLC may be owned entirely by a single member, or by multiple members. Ownership may be divided in accordance with the organizing member(s) desires. The ownership percentages may change at any time with the consent of the Members.
There are numerous forms of LLC management structure. Generally speaking, the LLC may be managed by its Members ("Member-Managed") or by a designated Manager or committee of Managers ("Manager-Managed"). The LLC may be organized so that all decision-making authority is reserved to a single manager or board of managers. Alternatively, certain decision-making authority could be delegated to a manager and certain other authority could be reserved to the members.
Another significant advantage of the LLC is the privacy it affords. Under Georgia law, an LLC Operating Agreement is not a matter of public record. Furthermore, names of Managers, Members, Officers, and ownership percentages are not regularly reported.
The LLC may not issue publicly traded "stock" as with a Corporation. Instead, a LLC issues Membership Units (or Interests), which are similar, and may be traded or sold between members, or assigned to new members in accordance with the LLC Operating Agreement.
The process of forming an LLC closely resembles that of a Corporation. Georgia law requires that "Articles of Organization" be filed with the Secretary of State. An LLC will have an "Operating Agreement" which, similar to a partnership agreement, governs the conduct of the business, including the rights and powers of its members, managers, and employees.
