LLC Utah Lawyer Responds to Commonly Asked Questions:
What is a Limited Liability Company?
A limited liability company or “LLC” is a distinct legal entity, similar to a corporation. This allows the LLC to conduct business, open a bank account, and receive a tax identification number. The main advantage for forming an LLC is to create limited liability for its owners known as “members”. As such, under most circumstances, the members are not personally liable for liabilities and debts of the LLC. So in the event an LLC owner meets with Salt Lake City Bankruptcy Attorneys to discuss whether a Chapter 7 Bankruptcy Utah filing or a Utah Chapter 11 Bankruptcy filing is appropriate, the members are typically not liable for the debts of the company. This usually hinders creditors from looking to the LLC members for recovery if the LLC lacks the ability to cover its debts and liabilities.
Is a Limited Liability Company Operating Agreement Necessary in Utah?
A LLC Utah lawyer would consider it prudent to create an LLC Operating Agreement for a business organized as a Utah Limited Liability Company, particularly if the business has two or more members. The Limited Liability Company’s Operating Agreement helps to clarify the members expectations in the business.
What are the Advantages of Creating an LLC Operating Agreement?
Utah law provides some default rules for limited liability companies. But a well drafted LLC Operating Agreement gives its members more flexibility to delineate rights and obligations of the LLC, its management, its members, and various other considerations.
For example, an LLC Utah lawyer would explain that the LLC Operating Agreement can specify who owns the LLC, who contributes to the LLC, who gets profits of the LLC, when are the profits of the LLC distributed, et
Contact a Utah Business Attorney Experienced with Setting Up LLCs
At Pearson, Butler & Carson, our Utah business attorney team has experience setting up LLCs and crafting LLC Operating Agreements. If you are an existing business owner and have not set up an operating agreement yet or feel that it may be time to modify the agreement, or if you are preparing to do a business entity formation, call our office today at (801) 495-4104. Our business law attorneys are standing by to assist you.