A Limited Liability Company (LLC) is a separate legal entity that can conduct business just like a corporation with many of the advantages of a partnership. It is taxed as a partnership. Its owners are called members and receive income from the LLC just as a partner would. There is no tax on the LLC entity itself. The members are not personally liable for the debts and obligations of the entity like partners would be. Basically, an LLC combines the tax advantages of a partnership with the limited liability feature of a corporation.
An LLC is formed by filing articles of organization with the secretary of state in the same type manner that articles of incorporation are filed. The articles must contain the name, purpose, duration, registered agent, and principle office of the LLC. The name of the LLC must contain the words Limited Liability Company or LLC. An LLC is a separate legal entity like a corporation.
Management of an LLC is vested in its members. An operating agreement is executed by the members and operates much the same way a partnership agreement operates. Profits and losses are shared according to the terms of the operating agreement.
Guam Operating Agreement for States who have Adopted the Uniform Limited Liability Act and the Revised Uniform Limited Liability Act The Guam Operating Agreement is an essential document for businesses operating in Guam or any state that has adopted either the Uniform Limited Liability Act (UCLA) or the Revised Uniform Limited Liability Act (SULLA). This agreement outlines the internal operation and management structure of a limited liability company (LLC) and ensures clarity and consistency in the decision-making process among members. The Guam Operating Agreement, based on either the UCLA or SULLA, serves as a contract between the members of an LLC and defines their rights, responsibilities, and obligations. It outlines important aspects such as the purpose of the company, the ownership interests of each member, and the allocation and distribution of profits and losses. It also sets guidelines for decision-making, voting rights, and procedures for admitting or removing members. Under the UCLA, which has been adopted by several states including Guam, the operating agreement can be written, oral, or implied by conduct. However, it is highly recommended having a written agreement to avoid misunderstandings and disputes. The UCLA also allows flexibility for members to create rules governing the LLC's affairs, as long as they are not inconsistent with state law. On the other hand, the SULLA, adopted by a few states including Guam, provides a more comprehensive and detailed framework for operating agreements. It offers default rules that govern the LLC's affairs if the members have not explicitly addressed certain aspects in the agreement. However, the SULLA also allows members to override these default rules in their operating agreement. There are various types of Guam Operating Agreements that may be applicable depending on the specific needs and preferences of the LLC and its members. Some common types include single-member operating agreements, multi-member operating agreements, and manager-managed operating agreements. A single-member operating agreement is used when an LLC is owned and operated by a sole member. This agreement outlines the member's responsibilities and decision-making powers. A multi-member operating agreement is applicable when an LLC has two or more members. It clarifies how decisions are made collectively, the distribution of profits and losses among members, and provisions for admitting or removing members. A manager-managed operating agreement is utilized when members appoint one or more managers to handle the daily operations of the LLC. This agreement delineates the authority and responsibilities of the managers, as well as the rights and obligations of the members. In conclusion, the Guam Operating Agreement, based on the UCLA or SULLA, is an important legal document that governs the internal operations and management structure of an LLC. It ensures clarity, consistency, and fairness among members and helps establish the foundation for a successful business venture. The agreement provides flexibility for customization based on the needs of the LLC, and various types of operating agreements exist to cater to the unique circumstances of the LLC, such as single-member, multi-member, and manager-managed operating agreements.
