![]() ![]() A LLC membership interest is similar to a shareholder interest in a corporation and is considered a security under Federal securities laws. The Massachusetts Limited Liability Company Act provides persons organizing a LLC with considerable flexibility regarding the creation and issuance of membership interests in a limited liability company. Certain types of businesses require a more comprehensive agreement while other enterprises require fewer protective and operating provisions to govern the enterprise. The following is an overview of provisions commonly included in a typical LLC operating agreement. Such agreements are commonly referred to as “LLC operating agreements.” In addition to the Certificate of Organization, the members of the LLC should enter into an agreement governing the terms, operation and lifecycle of the LLC. Step Two: Preparing the Limited Liability Company Operating Agreement. A professional services LLC must include as part of the filing of its Certificate of Organization, a certificate of the professional services regulating board indicating members’ compliance with professional eligibility standards. In addition to the foregoing, a LLC organized for the purpose of rendering a professional service in the Commonwealth of Massachusetts (such as the services of a physician, accountant, attorney, veterinarian, etc.) must indicate in its Certificate of Organization the specific professional services which it intends to render. The names of persons authorized to execute recordable documents affecting interests in real estate andĪny other information deemed appropriate by the person(s) organizing the limited liability company. The general nature of the business of the LLC The names and addresses of the managers of the LLC (if any) and the person other than managers authorized to execute documents to be filed with the Secretary of the Commonwealth The date of dissolution of the LLC (if any) The name and address of the limited liability company’s registered agent for the service of process The principal business address of the LLC in the Commonwealth of Massachusetts The name of the LLC, which should include the words “Limited Liability Company” or the abbreviation “LLC” and not be substantially similar to the name of any other venture conducting business in the Commonwealth of Massachusetts The document that must be filed with the Secretary of the Commonwealth of Massachusetts, the Certificate of Organization of the LLC, must include: Once it has been determined that organizing a limited liability company is in the best interest of the business venture, certain information must be gathered and certain documents prepared. ![]() Step One: Preparing and Filing the Certificate of Organization. All state tax-related questions should be directed to either an accountant or the Massachusetts Department of Revenue. Certain businesses must obtain a sales tax number from the Massachusetts Department of Revenue prior to commencing operations. The LLC should be in contact with its accountant to ensure that these taxes are paid. If a LLC is classified as a corporation for Federal income taxation purposes, such LLC must pay corporate taxes to the Massachusetts Department of Revenue. A LLC must also file an Annual Report with the Secretary of the Commonwealth on or prior to each anniversary of its organization. A limited liability company comes into existence when its Certificate of Organization is filed with the Secretary of the Commonwealth of Massachusetts Corporations Division. Secretary of the Commonwealth of Massachusetts. The LLC will be responsible for submitting records, information and fees to various governmental agencies on a regular basis. ![]() Maintenance obligations may also arise out of the provisions of the LLC operating agreement. Once a LLC is organized, continuing statutorily mandated obligations exist regarding the maintenance of the LLC. A business attorney and an accountant should be consulted regarding the legal and tax obligations of electing to organize a limited liability company and the consequences of choosing to operate a business under the umbrella of a LLC. There are both advantages and disadvantages to organizing a limited liability company. It is not necessary to form a limited liability company or incorporate to start a business, but it makes good business sense to do so as the business owner’s personal assets will be protected from law suits and the liabilities of the business. Prior to deciding to organize a LLC, alternatives such as organizing a corporation should be considered. Determining Whether to Organize a Limited Liability Company ![]()
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