A Limited Liability Company (LLC) is a type of legal structure available to business owners that grants its members protection from liability similar to a corporation but with the ability to be treated as a partnership for tax purposes. Therefore, an LLC may combine the best aspects of corporations and partnerships. However, it is important to give careful consideration to all requirements and options when forming an LLC.
An LLC can be organized with just one owner or a group of owners. The owners are called the “members” of the LLC, like the partners in a partnership. You must first choose a name for the LLC and determine if it is available to use. Under Pennsylvania law, your LLC name must contain the words “Company”, “Limited”, or “Limited Liability Company” or an abbreviation of any of these three, such as “LLC”. Name availability can be checked at the Pennsylvania Department of State business name database.
In order to create an LLC, a Certificate of Organization must be filed with the Pennsylvania Department of State. The Certificate includes the LLC’s name, the name and address of the LLC’s registered agent, the name and address of each organizer of the LLC, whether the LLC will be run by the members or a manager, and whether the LLC will provide professional services (such as medical or legal services in the case of a restricted professional company). Once the Certificate of Organization is filed, the LLC is created. There are no publication requirements.
Perhaps the most important document for an LLC is the Operating Agreement. Although not required by law, an Operating Agreement is highly recommended since it governs how the LLC will be operated and contains the agreement among the members. For example, it would include provisions relating to buy-outs in the event of death of a member or if a member wants out of the LLC and provisions relating to if members are required to make capital contributions into the LLC. The Pennsylvania Uniform Limited Liability Company Act of 2016 contains a number of default rules that apply to an LLC unless you opt out in the Operating Agreement. It is important to draft the Operating Agreement to meet your specific needs and goals for the LLC’s operations.
The attorneys of Supinka & Supinka PC, are experienced in forming LLCs. For more information and a consultation, please call Supinka & Supinka, PC at (724) 349-6768.
