What Is An LLC?

It’s the jivest entity out there. It’s the structure everyone is talking about. It’s the fluid….it’s the incomparable…LLC!

 

Texas, business, attorney, lawyer, LLC, corporate, starting a business

 

What Is An LLC?

I recently uploaded a video to Youtube that briefly explains what an LLC is, without all of the confusing and flowery language. I also give you examples of when using an LLC is helpful, potential pitfalls and things to think about. Think of an LLC (Limited Liability Corporation) as a box. It’s this structure, that you throw the business stuff into to protect the business and those things outside the box. It gives it a structure and an identity.

LLC’s are different from corporations because corporations are mostly driven by laws on the books. Around for centuries, there’s a pretty certain and set in stone way of doing corporations. With LLC’s, they’re much more recent. Still filed with the state you plan to operate in, how they’re run is largely up to the members of the LLC and the Operating Agreement put together.  

Looks Can Be Deceiving…

I get calls every week about the LLC, and it’s no wonder why. Created by contract, the LLC allows you to do some amazingly creative things to structure. But the simplicity can be deceiving. There are tax consequences when using an LLC, and anyone looking to utilize investors as a form of capital will have to be especially careful. LLC’s can be tricky, and many investors prefer to stay away from them. Insisting you convert to a corporation instead, which comes with costs.

Before I go….

You’ll note I didn’t throw up a template Operating Agreement. Keep in mind, this is essentially the instruction manual for how your business will run. What happens day to day will come down to this document. The LAST thing you want to do is throw together something someone else came up with.

Remember those calls I get about LLC’s? Well, a good portion are questions about how they work. An even larger portion is from LLC’s that had a crummy Operating Agreement and now don’t know what to do. I hate to break the news to em’, but now each Member is probably going to have to hire an attorney to clean the mess up if they can’t figure it out themselves.

 

business, attorney, lawyer, houston, texas, LLC, corporation

 

Always tailor your Operating Agreement to your circumstances, and ask questions where something doesn’t make sense.

 

Anywho, check out the video below. And feel free to check out any of the other videos. Enjoy!

 

 

 

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