Appendix B. LLC Explanation

• Author: Jeffrey Robert Matsen
• Profession: Founder and managing partner of Matsen Voorhees Mintz LLP
• Pages: 87-90

87

APPENDIX

B

LLC Explanation

1. What is a Limited Liability Company?

A limited liability company or “LLC” is a business entity that is authorized by specific legislation in most

states of the United States and in many foreign countries. In almost every instance, the state or country

in question issues a charter to the LLC upon its formation. The most significant characteristic possessed

by LLCs is, as the name suggests, that it provides limited liability. In this regard, it is very similar to a

corporation.

2. How Do You Form an LLC?

An LLC is formed by filing the Articles of Organization with the relevant Secretary of State in the US

or other licensing agency in a foreign country. The Articles of Organization are normally very brief and

simple and provide only basic information with respect to the name of the company, the agent for service

of process, the company’s address and its manager or members.

3. How Is an LLC Structured?

An LLC is structured much like a partnership except that it has members instead of partners. The LLC can

be member-managed in a manner similar to a General Partnership, or it can be Manager-managed just as