A Limited Liability Company (LLC) is a separate legal entity that can conduct business just like a corporation with many of the advantages of a partnership. It is taxed as a partnership. Its owners are called members and receive income from the LLC just as a partner would. There is no tax on the LLC entity itself. The members are not personally liable for the debts and obligations of the entity like partners would be. Basically, an LLC combines the tax advantages of a partnership with the limited liability feature of a corporation.
An LLC is formed by filing articles of organization with the secretary of state in the same type manner that articles of incorporation are filed. The articles must contain the name, purpose, duration, registered agent, and principle office of the LLC. The name of the LLC must contain the words Limited Liability Company or LLC. An LLC is a separate legal entity like a corporation.
Management of an LLC is vested in its members. An operating agreement is executed by the members and operates much the same way a partnership agreement operates. Profits and losses are shared according to the terms of the operating agreement.
Connecticut Sample Limited Liability Company (LLC) Operating Agreement is a legally binding document that outlines the intricacies and provisions governing the operations and ownership shares within an LLC in the state of Connecticut. This agreement serves as a crucial foundation for members to establish rules and regulations, allocate ownership interests, and determine the distribution of company assets. The Connecticut Sample LLC Operating Agreement primarily focuses on the division of company assets into ownership shares among its members. This distribution is vital in determining each member's rights, responsibilities, and the proportion of profits or losses they are entitled to. A well-drafted agreement ensures a clear understanding of the ownership structure, outlines decision-making processes, and establishes mechanisms for addressing potential conflicts or disagreements. In Connecticut, there can be different types of Sample LLC Operating Agreements, tailored to meet specific business requirements or circumstances. While the fundamental principles and provisions generally remain consistent, variations can arise based on the following: 1. Single-Member Operating Agreement: If a Connecticut LLC has only one member, a Single-Member Operating Agreement is used. This agreement outlines the member's ownership share, their management duties, and the procedures for transferring ownership interests. 2. Multi-Member Operating Agreement: In cases where an LLC includes multiple members, a Multi-Member Operating Agreement is required. This type of agreement covers the division of ownership shares, member contributions, decision-making mechanisms, and procedures for adding or removing members. 3. Capital-Based Operating Agreement: A Capital-Based Operating Agreement emphasizes the proportion of capital contributed by each member to determine their ownership shares and profit/loss distribution. This type of agreement is suitable when members' contributions significantly impact their ownership rights. 4. Percentage-Based Operating Agreement: A Percentage-Based Operating Agreement allocates ownership shares based on predetermined percentages rather than capital contributed. This enables flexibility in distributing profits or losses and is commonly preferred if contributions are not the sole determinant of ownership interests. 5. Silent Passive Investor Operating Agreement: In scenarios where an LLC has silent or passive investors, a Silent Passive Investor Operating Agreement is often utilized. This agreement sets forth guidelines on the extent of involvement, profit distribution mechanisms, and protection for passive investors' limited liability status. Regardless of the specific type of Sample LLC Operating Agreement, it is essential to ensure adequate legal counsel and customize the document to meet the unique needs and goals of your Connecticut-based LLC. By establishing a comprehensive and well-crafted agreement, members can mitigate future disputes, protect their interests, and facilitate smooth business operations.
