Limited Liability Company

Profit and loss sharing

Based on capital invested and work performed by each member

Cooperative

Business structure where owners are called members

Voting rights

Determined by an operating agreement, not necessarily based on patronage

Four methods of doing business in the United States

Different ways to structure a business

Articles of organization

Document filed with the Secretary of State to establish an LLC

Operating agreement

Document that determines profit sharing, voting rights, and other aspects

Cooperatives

Fit within the four methods of doing business

Limited Liability Company (LLC)

Hybrid business structure combining partnership and corporation characteristics

At least two members

Minimum requirement to form an LLC

No restrictions on role

Owners are free to become involved in the management of the company

Limited personal liability

Protection from personal liability for company debts and obligations

Capital

Provided by members to a cooperative

Chapter 2 Review Questions

Questions to assess understanding of the material

Death, entry, or withdrawal of a member

Requires restating the nature of the relationship between members

Expense at startup

Significant legal work and filing of documents required

Single-tax treatment

Taxation similar to a partnership

Liability

Unlimited responsibility for debts and obligations