Limited Liability Company
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Term
Main definition
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A legal entity organized under state law through the filing of a charter (typically, called a Certificate of Formation and in California and certain other states called Articles of Organization, coupled with the signing of an LLC Agreement and in California and certain other states called an Operating Agreement). The LLC is owned by its members (or LLC interest holders), and typically is managed by its manager(s) or officers and overseen/directed by its managers. The term "managers" sometimes refers to a board of managers. Limited liability companies sometimes present, but not under all circumstances, certain unique advantages (as compared to choosing to form as corporations) regarding governance, flexibility and, if desired, (flow-through) taxation to owners. A limited liability company is acceptable to some investors some of the time, but is unacceptable to some investors all of the time. See Pass-Through Entity.
