NEVADA LLC's

A limited liability company (LLC) is created by filing Articles of Organization with the Secretary of State. The owners of a LLC are known as members. The affairs of a LLC are handled by managers or the members, as compared to a corporation that has officers and directors.

LLC’s usually have a written Operating Agreement that details items such as management, control, distributions, members’ rights, ability to transfer ownership positions, etc. In addition, the members may choose to prepare an additional Membership Agreement that serves much like a Shareholders' Agreement of a corporation.

LLC's have the option to select how they would like to be taxed. Usually, the member(s) of a LLC select to have all profits and losses pass through to them. As such, the LLC does not have to pay any income tax. Usually, a single member LLC will usually be treated as a sole proprietorship for income tax purposes, while a LLC with 2 or more members will be treated as a partnership for income tax purposes. No separate form must be filed and approved by the I.R.S. to receive this "pass through" status, unlike a S-corporation. Also, there are generally no restrictions on the number or types of members on a LLC.

Unless otherwise provided in the Articles of Organization, or an agreement signed by a member or manager of a LLC, no member or manager of a Nevada LLC is personally liable for the debts or liabilities of the company. Further, it is usually improper to even name a member of a LLC as party to a lawsuit involving the LLC.

In Nevada, there are less statutes and regulations that pertain to LLCs as opposed to corporations. Thus, there are less statutory guidelines that apply, theoretically giving LLCs a little more flexibility in which to operate. The advent of LLCs, however, is a relatively recent development by legal standards. As such, there have not been as many court decisions regarding LLCs and some of the statutory authority that governs LLCs has not been as fully tested in the judicial system.