Chapter 29  What is a limited liability company (LLC)? Offers its owners many advantages like easy formation, flexible operation, limited legal liability of the owners, and pass-through taxation  What are the owners of an LLC called? Members  What are the Uniform Limited Liability Company Act (ULLCA) and Revised Uniform Limited Liability Company Act (RULLCA)? ULLCA; model statute designed to promote uniformity among various state LLC laws. Can vary state to state RULLCA; amended form of ULLCA modifies the areas of formation, organizational matters, and operating agreement. Clarifies technical applications of LLC governance like handling deadlocks and rights of departed members of LLC What must be filed with the designated public official in that state to form an LLC?  Articles of organization  What is an operating agreement? Governs an LLC and sets out the structure and internal rules for operation of the entity  What is the difference between a member-managed LLC and a manager-managed LLC? Member-managed: like GP, members have authority to bind the business Manager-managed: name a designated manager who had the day-to-day operational responsibilities while non managing members are typically investors  What is the general rule regarding LLC members’ personal liability for any business debt or liability if the business venture of the LLC fails? LLC members are insulated from personal liability for any business debt or liability if it fails. Landlords and other creditors often require a personal gaurantee  What is the tax treatment of an LLC? Pass-through entities or can be elected to be taxed as a corporation if they consider 4 the corporate tax structure to be more favorable  What is dissociation from an LLC? Individual member decides to withdraw  What is dissolution of an LLC? Liquidation process of an LLC to dissolve it forever  How did the Chancery Court of Delaware rule in AK-Feel, LLC v. NHAOCG, LLC (2012) on the claim of breach of fiduciary duty? In favor of NHAOCG, the operating agreement ambiguously limits fiduciary duties 5