It is no surprise that the company corporation has been the typical entity of choice; this is because it has been existing ever since time immemorial. For about 20 years, the LLC or Limited Liability Company has been a well received entity not just in Delaware but in other parts of the United States.
Okay, who exactly owns each entity? The ownership of a corporation is articulated through the purchasing of shares. These shares basically indicate specific ownership positions in the business; shareholders are also bestowed a few privileges.
A Delaware LLC deal with ownership of the business quite in a different way as they are a ignored entity for tax purposes and are truly a limited liability “sole proprietorship” if one owner or a limited liability “partnership” if owned by over 2 or more people. The ownership of a Limited Liability Company is expressed as a portion of the overall ownership available; which is considered in several states as a “Unit Interest”. People who own interest in an LLC are just known as “members” and not interest holders. Unlike corporations, LLC's can't be traded publicly as there are no shares to exchange.
To a whole lot of people, the LLC can sound like a quite strange business entity. LLC's can be effectively operated by each and every member. This is just referred to as a member managed business. It could also be operated by one person who is known as the manager. Different from the company corporation, an LLC doesn't include board members or officers which can be a real pickle when it is the time for signing contracts and so on. Because of this, the state of Delaware and a very huge number of states have included legal provision that enable for LLCs to have a President, VP, Treasurer and many more.
Lastly, a typical Delaware LLC is generally marketed on the claim that members won't need to proceed through all the uninteresting corporate formalities. Well, this is pretty true, but not adhering to several the formalities is simply asking for a world of hardships. Everything that is deemed vital must be put down in black and white as it will assist to create a record of what happened and what has been occurring in the running of the business. If one fails to do this and a dispute occurs between members, there is completely no real way to make out which member is right and which one is wrong. The only approach to deal with the dispute is by engaging the services of an attorney, and whoever has the best lawyer wins!
The Limited Liability Company has certainly carved out a niche for itself as a really viable business entity in the modern business environment. If you have resolved your mind to start an LLC in Delaware or in any other state, ensure that you know how an LLC functions and how you will be able to effectively operate one.