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.
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