Chapter 38

This is a hybrid that combines the limited liability aspects of a corporation and the tax advantages of a partnership. They are governed by state statutes, which vary from state to state.

Like a corporation has shareholders, the owners of an LLC are known as ... and enjoy limited liability.

These are needed in order to form an LLC. They must be filed with a central state agency - usually the secretary of state's office. They must include the name of the business, its principal address, the name and address of a registered agent, the members' names, and how the LLC will be managed. The business name must include the words or acronym LLC.

This may be formed to decide how to operate the various aspects of the business. In many states, this is not required for an LLC to exist, and if there is one, it need not be in writing. They typically contain provisions relating to the following areas:

1. Management
2. How profits will be divided
3. How membership interest may be transferred
4. Whether dissociation of a member will trigger dissolution of the LLC, and buyout price calculations
5. Whether formal members' meetings will be held
6. How voting rights will be apportioned

Two or more persons or business entities combine their efforts or their property for a single transaction or project or a related series of transactions or projects.

AKA an investment group, several individuals or firms join together to finance a particular project.

This is a true hybrid of a partnership and a corporation. It has many characteristics of a corporation in that (1) its ownership is represented by transferable shares of stock, (2) it is managed by directors and officers of the company or association, and (3) it can have a perpetual existence. Like a partnership, however, it is formed by agreement. Property is held in the names of the owners, who are called shareholders, and they have personal liability.

This is created by a written trust agreement that sets forth the interests of the beneficiaries and the obligations and powers of the trustees. Legal ownership and management of the trust's property stay with one or more of the trustees, and the profits are distributed to the beneficiaries.

This is an association that is organized to provide an economic service to its members (or shareholders). It may or may not be incorporated. Most are organized under state statutes for this organization, general business corporations, or LLCs.