Chapter 38: Limited Liability Companies and Special Business Forms

Advantages of the LLC

limited liability, flexibility in taxation, management and foreign investors (flexibility it offers)

Business Trust

A business form created by a written trust agreement that sets forth the interests of the beneficiaries and the obligations and powers of the trustee(s). A business trust is similar to a corporation in many respects. Beneficiaries are not personally liable for the debts or obligations of the business trust

Joint Stock Company

A business form similar to a corporation in some respects (transferable shares of stock, management by directors and officers, perpetual existence) but otherwise resembling a partnership

Limited Liability Company (LLC)

A hybrid form that combines the limited liability aspects of the corporation and tax advantages of a partnership

Cooperative

An association organized to provide an economic service, without profit, to its members. A cooperative can take the form of a corporation or a partnership.

Syndicate

An investment group that undertakes to finance a particular project; may be organized as a corporation or as a general or limited partnership

Joint Venture

An organization created by two or more persons in contemplation of a limited activity or a single transaction; similar to a partnership in many aspects

Special Business Forms

Joint venture, syndicate, joint stock company, business trust, cooperative

Disadvantages of the LLC

State LLC statues are not uniform

Operating Agreements

members of an LLC can decide how to operate the various aspects of the business by forming an operating agreement

Members

owners of the LLC have limited liability