The LLC is a hybrid business entity which combines the best features of partnerships and corporations. LLCs will be commonly used for real estate ventures and family partnerships because of their tax advantages.

The LLC is formed by the filing of Articles of Organization with the Secretary of State and publishing a notice. The operating agreement, which is similar to the by-laws of a corporation, sets forth the members’ rights and obligations and the required procedures for the LLC’s operation.

A properly formed LLC will be taxed as partnership but its members will enjoy limited liability like corporate shareholders. Members are not personally liable for the debts, obligations and liabilities of the LLC.


  • LLCs, like partnerships, are not subject to income taxation. Gains and losses flow through the company and are taxed to or deducted by the members.
  • LLCs have a number of tax advantages over corporations. For example, an LLC may make “special allocations” among the partners. A twenty percent (20%) member could be allocated ninety percent (90%) of the depreciation deductions attributable to a particular property.

See also…

Business and Finance Law