The Llc : Flash Presentation

Not All Llcs Are The Same

Are all corporations the same? Are all LLCs the same? No.

The wording of the Articles of Organization of the LLC creates the LLC when filed with the Secretary of State. The Articles of Organization spell out whether it’s a manager-managed or member managed LLC.

Manager-managed LLC: Charging order protection secures assets from hostile creditor threats.

The charging order protection is what triggers the hostile creditor to be liable for an income tax, without collecting on your assets. This is called “phantom income,” and it’s successfully restricted from the hostile creditor ONLY when the LLC is manager-managed.

They don’t want to confuse you. They know you’re most likely deciding between a C Corporation and an LLC. They don’t want to lose the sale and have you walking away scratching your head. So, they don’t mention it. They prefer to limit your choices and make the decision simple stupid.

Our clients are not simple stupid. They want to learn more and that’s why they come to us in the first place.

The state of choice means a great deal because it determines how secure the benefits really are. A Nevada LLC or a Wyoming LLC is extremely secure in terms of the charging order protection.

The operating agreement determines what everyone can and cannot do (manager, members, and LLC), and how it’s done.

  • The operating agreement validates that you did something right, such as bringing in another member, issuing member certificates, or selecting the manager of the LLC.

Problem: Most LLC’s are written in very general form. They try to be everything for everyone. How do we know this? Because 99% of all incorporators use the same operating agreements time and time again. It’s a broken record. And although this objective is noble in theory, it leaves clients at a disadvantage. Most incorporators are too lazy to draft an original operating agreement.

LLCs intended for asset protection must be designed for that purpose from the ground up. And since many asset protection planners are glorified incorporators, they aren’t prepared to get the job done right the first time. It’s easier for them to just copy another person’s operating agreement.

Solution: An specialized operating agreement was drafted by a CPA/Attorney for the purpose of asset protection and limited liability. Compare that to the run-of-the-mill LLCs that you buy on the internet.