Limited Liability Companies and Special Business Forms

This set of vocabulary flashcards covers the fundamental concepts, formation, management, and dissolution of Limited Liability Companies and various special business forms including joint ventures and cooperatives.

Limited Liability Company (LLC)

A hybrid business form that combines the limited liability aspects of a corporation and the tax advantages of a partnership.

Member

A person who has an ownership interest in a limited liability company.

Articles of Organization

The document filed with a designated state official by which a limited liability company is formed, containing information such as business name, principal address, and name of the registered agent.

Member-managed LLC

A management structure where decisions are made by majority vote of the members.

Manager-managed LLC

A management structure where a designated person or group is chosen to manage the firm.

Uniform Limited Liability Company Act (ULLCA)

The act that governs fiduciary duties in an LLC, establishing that a manager owes duties to the LLC and its members.

Operating agreement

An agreement in which the members of an LLC set forth the details of how the business will be managed and operated, including division of profits and voting rights.

Dissociation

The process triggered by events such as a member's voluntary withdrawal, expulsion, bankruptcy, incompetence, or death.

Winding Up

The process of collecting, liquidating, and distributing an LLC's assets, which includes paying off debts and returning members' capital contributions.

Joint venture

A joint undertaking by two or more persons or business entities to combine their efforts or property for a single transaction or project.

Syndicate

An investment group that finances projects such as shopping center construction or the purchase of a professional sports franchise.

Joint Stock Company

A hybrid of a partnership and corporation that has transferable shares of stock and is managed by directors and officers, yet is formed by agreement rather than statute and treated like a partnership.

Business Trust

A business form created by a written trust agreement where legal ownership and management are held by trustees for the benefit of others who are protected from responsibility for debts.

Cooperative (Co-op)

A business organized under state statutes to provide an economic service to its members or shareholders, with dividends distributed based on the basis of transactions.