Part Two

Do I need two members?

Many states allow for creating a single-member Limited Liability Company, while other states require two or more members. It must be remembered that the IRS may apply different tax liabilities to a Limited Liability Company with only one member (taxed as a corporation or disregarded entity for tax purposes) than it would to a Limited Liability Company having more than one member (taxed as a partnership by default).

Are Limited Liability Companies required to hold meetings?

In a number of states, a Limited Liability Company is not required to hold the simple member/manager meetings to maintain the protection provided against liability as are required by officers/directors and shareholders of corporations. For example, the state of California does not require member/manager meetings unless the Limited Liability Company’s Articles of Organization specifically require them

Who votes in a Limited Liability Company?

In the majority of cases, voting rights are proportional to the percentage of membership (ownership) interests. On the other hand, the articles of organization or operating agreement may establish a different set of conditions for voting rights

Can I sell Member Shares?

Usually, member shares may be sold only upon approval of members who hold a majority in interest, unless otherwise stipulated by the articles of organization or the operating agreement.

If you would like more information regarding asset protection, trusts, family limited partnerships or the subject of this article please call or email our office.