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.
The Hawaii Operating Agreement is a legal document designed to govern the internal affairs and management of a limited liability company (LLC) in the state of Hawaii. It outlines the rights, responsibilities, and operating procedures of the LLC's members and managers. This agreement is particularly relevant for states that have adopted either the Uniform Limited Liability Act (UCLA) or the Revised Uniform Limited Liability Act (SULLA), as it ensures compliance with these laws while customizing the terms specific to Hawaii. The Hawaii Operating Agreement for states adopting UCLA or SULLA typically includes various key provisions. Firstly, it outlines the purpose of the LLC, specifying the type of business it will engage in. It also establishes the initial members and their respective ownership interests or capital contributions. Additionally, it defines the management structure, specifying whether the LLC will be member-managed or manager-managed. The agreement outlines the duties and powers of members and managers, including decision-making processes, voting rights, and authority to bind the LLC. It may also include provisions related to admitting new members, withdrawing or dissociating from the LLC, and transferring ownership interests. Furthermore, the Hawaii Operating Agreement addresses financial matters such as profit and loss allocation, distribution of profits, and capital account maintenance. It may include provisions related to taxation, audited financial statements, and the LLC's fiscal year. In the case of states that have adopted both UCLA and SULLA, there might be two types of Hawaii Operating Agreements available. One would be specifically designed to comply with UCLA's provisions, while the other would adhere to SULLA's more modern and updated regulations. To ensure legal compliance and protect the interests of the LLC and its members, it is crucial to consult with an attorney specializing in business law while drafting or reviewing the Hawaii Operating Agreement. They can provide guidance on the specific requirements of UCLA or SULLA adoption in Hawaii and assist in tailoring the agreement to fit the unique needs and goals of the LLC.
