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.
The Kentucky Operating Agreement is a legal document that outlines the internal operations and management structure of a limited liability company (LLC) in the state of Kentucky. This agreement is specifically designed for states that have adopted the Uniform Limited Liability Company Act (UCLA) and the Revised Uniform Limited Liability Company Act (SULLA). The Kentucky Operating Agreement serves as a contract between the members of the LLC, establishing their rights, responsibilities, and obligations within the company. It provides a framework for decision-making processes, profit and loss distribution, ownership percentages, and voting procedures. There are different types of Kentucky Operating Agreements based on the specific provisions and requirements under UCLA and SULLA. These include: 1. Single-Member Operating Agreement: This agreement is suitable for LCS with only one member. It outlines the member's rights, responsibilities, and decision-making authority, as well as how the member's interest can be transferred or inherited. 2. Multi-Member Operating Agreement: This agreement is designed for LCS with multiple members. It defines the roles and responsibilities of each member, their capital contributions, and how profits and losses will be allocated among them. It also addresses the admission or withdrawal of members, dispute resolution mechanisms, and procedures for amending the operating agreement. 3. Manager-Managed Operating Agreement: In some LCS, the members may choose to designate a manager or managers to handle the daily operations and decision-making on behalf of the company. The manager-managed operating agreement outlines the authority, duties, and responsibilities of the manager(s) and the rights and limitations of the members. 4. Member-Managed Operating Agreement: This agreement is suitable when all members of the LLC want to actively participate in the management and decision-making processes. It defines the powers and duties of each member and outlines the company's governance structure, voting procedures, and management responsibilities. In addition to the above types, the Kentucky Operating Agreement may contain provisions related to capital contributions, profit distributions, tax matters, indemnification of members, dissolution procedures, and other specific matters that are necessary for the smooth operation of the LLC. It is important to consult with a qualified attorney to ensure that the Kentucky Operating Agreement is customized to meet the specific needs, requirements, and statutory provisions of the UCLA and SULLA in the state of Kentucky.
