Describe an LLC and the rights of its members

Answer 1

An LLC (limited liability company) is a noncorporate business organization that provides limited liability to all of its owner/members and permits all of its members to participate in management of the business. It must be formed in substantial compliance with a state's LLC statute. A member has no property interest in property owned by the LLC, but a member does have an interest in the LLC, which is personal property. A member's interest includes two components: (a) a financial interest, which is the right to share profits and receive distributions; and (b) a management interest, which consists of all other rights granted to a member by the LLC operating agreement and the LLC statute. The management interest typically includes the right to manage, vote, obtain information, and bring enforcement actions. Typically LLC statutes grant members the right to vote on proposals to adopt or amend the operating agreement, admit any person as a member, sell all or substantially all of the LLC's assets prior to dissolution, and merger. Members have the right to inspect the LLC records and to bring derivative actions. Unless otherwise provided in the LLC's operating agreement, a member has the right to assign his financial interest in the LLC.