The Modern Business Entity: Limited Liability CompanyA Limited Liability Company ("LLC") is an extremely popular business entity due to its fluidity, favorable tax structure, and flexibility. The LLC is a separate entity unto itself. An LLC is controlled by its members and operated by its managers, similar to a Corporation's shareholders and officers respectively. It has the power to do things that an individual can do, such as purchase land and enter into contracts, and even has its own federal identification number, similar to an individual having a social security number.
Limited liability protection allows the member(s) and manager(s) of an LLC to protect their personal assets, in most circumstances, from business creditors and individuals (or other business entities) who seek remedies stemming from the negligence or wrongdoings of the LLC. This protection, however, may be pierced ("Piercing the Veil") if an LLC and its member(s) and manager(s) do not take the necessary steps to ensure that the entity is separate from themselves.
For example, a member or manager contracting on behalf of the company should always sign on behalf of the LLC and provide their corresponding title (i.e., President). Another good example is the need to keep separate bank accounts (business and personal) and not to commingle funds (i.e., do not use business checks to purchase your personal, family groceries from the local supermarket). These are just a few considerations in order for an LLC to maintain their limited liability protective shield. It is important to speak to a skilled business attorney who can advise you on how to maintain your company's limited liability protection.
Virginia Limited Liability Company (Virginia LLC)Deriving its authority from state statutes, the LLC is a fairly customizable business entity, moldable to the needs of the business and its members. In the Commonwealth of Virginia, a Limited Liability Company is organized under Virginia Statutes §13.1-1000 et seq. (the "Virginia Limited Liability Company Act").
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