We have enthusiastically endorsed it as the latest business and estate planning tool, but it has special significance for some of our real estate investors. A Certificate of Formation must be filed with the Secretary of State. An LLC agreement is optional, but you would be crazy not to have one. An LLC can be organized for any legal purpose except banking and insurance. An LLC can have unlimited members, and members can be individuals, other partnerships, corporations, trusts, and charitable entities.
Managers can be members or professional managers.
In this age of frivolous law suits, limited liability should catch every-one's eye. This gives you the shield of the corporation and the personal benefits of a partnership. Members can also be subject to personal liability in the same way a corporate veil can be pierced. The LLC act establishes internal organizational features intended to preclude free transferability of interest, continuity of life, and centralized management, in order to cause the LLC to meet the IRS tax test of a partnership. Otherwise, you get taxed by the Internal Revenue Service as a corporation.