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.
Montana Sample Limited Liability Company (LLC) Operating Agreement is a legal document that outlines the rights, responsibilities, and obligations of the members of the LLC. It serves as a blueprint for how the company will be managed and its assets divided among the ownership shares. This operating agreement is specifically designed for businesses operating in Montana and provides a framework that ensures smooth operation and minimizes potential disputes. Under this agreement, the company assets are divided into ownership shares based on the percentage of ownership each member holds. The members' respective ownership interests determine their rights to profits, losses, and decision-making power within the LLC. The Montana Sample LLC Operating Agreement recognizes different types of ownership shares that may exist within the company. These include: 1. Voting Shares: Members holding voting shares have a higher level of decision-making power within the LLC. Their votes determine crucial matters such as the appointment of managers, changes in the operating agreement, or major business decisions. 2. Non-Voting Shares: Members with non-voting shares have a limited say in the decision-making process. While they may not have voting rights, they still have the right to receive distributions and profits according to their ownership percentage. 3. Preferred Equity: Preferred equity shares provide certain advantages to the holders, such as priority distribution of profits or assets during the company's liquidation or sale. These shares are often used to attract investors or reward members with a higher level of financial contribution or expertise. 4. Common Equity: Common equity shares provide equal rights to all members, regardless of their financial contributions or expertise. These shares typically entitle members to an equal share of profits and losses and are often issued to the founders or original members of the LLC. In a Montana Sample LLC Operating Agreement, all aspects of the company's operations, including member contributions, management structure, decision-making processes, profit distributions, and dispute resolution mechanisms, are meticulously detailed. By delineating the company's structure and operational guidelines, this agreement helps ensure all members operate with a unified vision and protects the company's assets. Note: It is important to consult with a legal professional to draft an operating agreement tailored to the specific needs and requirements of your company, as each business may have unique considerations.
