Arizona limited liability companies
A Limited Liability Company (“LLC”) is a separate and independent legal entity than the individuals who create it (the “Members”). As suggested by its name, a LLC shields its Members from personal liability in the event litigation ensues and a Judgment obtained against the LLC as a result of its operations.
One distinguishing factor between LLCs and corporations is that Limited liability companies do not have to follow the formalities that a corporation otherwise has to follow as it conducts its regular business operations (i.e. Board Meetings, Minutes; Board Resolutions; Shareholders voting, etc.). Furthermore, LLCs do not pay separate tax on their profits, but are rather taxed through their Members’ individual Tax Returns. This avoid the double-taxation issues that corporations sometime face, when S-Corp election is not made. However, both LLCs and corporations may qualify for S-Corp status for taxation purposes.
In LLCs with two or more members, an Operating Agreement will typically outline the Members’ understandings with respect to all aspects of the business operations, including without limitation the sharing profits and losses; respective managerial roles, if any; and, additional obligations to the company.
Our business attorneys help our clients file the necessary legal documents with the applicable governmental agencies to incorporate and/or organize new business entities in Arizona, such as corporations and limited liability companies, respectively. Our business attorneys further assist our clients with tax-related matters involving new entities, including without limitation, obtaining an Employer Identification Number with the Internal Revenue Services, and making proper tax elections (i.e. S-Corp status).
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