What to Consider When Forming a Limited Liability Company

Forming a Limited Liability Company (LLC) can be an excellent choice for many businesses, as it provides the owners with personal liability protection and tax benefits. However, before you form an LLC, there are several key factors to consider to ensure that you set up your business in a way that best meets your needs and goals. In this blog post, we’ll cover the key considerations when forming an LLC.

Governance: Member-Managed vs. Manager-Managed vs Single Member LLC

Member-Managed vs. Manager-Managed LLCs

When forming an LLC, you will need to decide if you want a member-managed or a manager-managed LLC. In a member-managed LLC, all members have a say in the management and operation of the business. In a manager-managed LLC, one or more members are designated as managers who are responsible for managing the business. The managers make all decisions regarding the business and report to the members.

Single-Member LLCs

A single-member LLC is an LLC with only one owner. Single-member LLCs are treated as disregarded entities for tax purposes, which means that the business’s income and expenses are reported on the owner’s personal tax return. If you plan to run the LLC on your own, a single-member LLC may be a good option for you.

Registered Agents

A registered agent is a person or entity that is designated to receive legal and tax-related documents on behalf of the LLC. Every LLC must have a registered agent, and it is important to choose a registered agent who is reliable and can be reached during normal business hours. A registered agent can be an individual who lives in the state where the LLC is formed or a commercial registered agent service.

Purpose of the LLC

While an LLC is not required to state a specific purpose in its formation documents, some LLCs may choose to do so in order to clearly define the scope of the business. Stating a specific purpose can also help to prevent the business from being subject to unintended legal liabilities. For example, if the purpose of the LLC is to own and manage rental properties, it would not be appropriate for the business to engage in unrelated activities such as manufacturing.


Forming an LLC is a big decision that requires careful consideration of several key factors. When deciding how to structure your LLC, it is important to consider whether you want a member-managed or a manager-managed LLC, if a single-member LLC is right for you, and who you will appoint as your registered agent. Additionally, you should consider whether you want to state a specific purpose for your LLC, as this can help to define the scope of the business and prevent unintended legal liabilities.

At Brashears Law Group, PLLC we help clients with their legal needs and business goals. We are here to assist with your LLC’s contract needs today.

Contact us today to discuss forming your LLC.

Share :


More Tips