| Advertising. In accordance with rules established by the Supreme Judicial Court of Massachusetts. This web site must be labeled "advertising." It is designed to provide general information for clients and friends of the firm and should not be construed as legal advice, or legal opinion on any specific facts or circumstances. This web site is designed for general information only. Unless and until you enter into a formal agreement with Attorney Mwangi, he is not your attorney and you do not have an attorney-client relationship with him. All Rights Reserved. Attorney Mwangi is also an Internet lawyer |
| Mwangi Law Office |
 |  |  |  |  |  |
Contact a Massachusetts business lawyer at the Mwangi Law Office
Contact one of our Massachusetts corporate lawyers to find out what we can do for you. We offer a free initial consultation.
We are available for evening and weekend appointments in the Boston area.
Contact one of our Massachusetts corporate lawyers to find out what we can do for you. We offer a free initial consultation.
We are available for evening and weekend appointments in the Boston area.
MASSACHUSETTS LIMITED LIABILITY COMPANIES
Please note that the following should not be construed as legal advice. You should consult an experienced
Massachusetts business attorney if you have a specific legal matter that needs to be addressed. Contact us today at
(800) 719-4889 if you need help with your Massachusetts business matter (you can read about our lawyers and
professionals here). Please review our main business law page if you have additional questions about the process of forming
a business entity in Massachusetts.
Massachusetts Limited Liability Companies
A limited liability company is a business structure organized under an enabling statute that offers both limited liability for
participants and "pass through" treatment for tax purposes. For both federal and Massachusetts purposes, limited liability
companies may elect to be taxed either as partnerships or as corporations. A limited liability company may be managed by its
owners (member-managed) or may be managed by a manager (manager-managed), who may be a member or a nonowner.
Statutory Requirements for Formation
A limited liability company is organized by the execution and filing of a certificate of organization with the Massachusetts
secretary of state together with the filing fee of $500.
Control and Management
Limited liability companies are not required to have operating agreements. However, in the absence of an operating
agreement governing issues of management and control, the Limited Liability Act has certain default provisions that will
automatically control the relationships of the members and the managers.
The extreme flexibility permitted for operating agreements allows practitioners to design entities suited to their clients'
purposes. Limited liability company operating agreements may create structures similar to limited partnerships in which the
management and control of the enterprise are delegated to a manager operating independently of the members; may
design entities similar to corporations in which members elect a board of managers, whose terms are limited, to manage the
enterprise; or may create forms similar to general partnerships in which all of the members have an equal say in the
management of the enterprise.
Regardless of whether a member participates in the management of the limited liability company, however, he or she is
entitled to information concerning the business and financial condition of the limited liability company; its federal, state and
local tax returns; and certain other information.
Liability
Members and managers of a limited liability company are generally free from personal liability for the debts and obligations of
the company. However, except to the extent otherwise set out in the operating agreement, members are obligated to the
limited liability company for promised contributions of property or services and may be liable to creditors if they advanced
credit to the limited liability company in reliance on the obligation of the member to make contribution.
Continuity of Existence
If so stated in its operating agreement, the life of a limited liability company can be perpetual (subject to rights of its
members or managers to judicial dissolution), or it can terminate on the occurrence of events specified in the operating
agreement. In the absence of a dissolution date specified in the operating agreement, a limited liability company terminates
on the earlier to occur of (1) the written consent of all of its members; (2) the death, insanity, retirement, resignation,
expulsion, bankruptcy or dissolution of a member; (3) the occurrence of any other event that terminates the membership of a
member in the limited liability company, unless the business is continued by vote of all remaining members within 90 days
after termination event; or (4) judicial dissolution.
Transferability of Interests
Subject to federal and state securities laws, a limited liability company's interest is assignable, in whole or in part, unless
otherwise provided in the operating agreement. However, an assignee of an interest has no right to participate in the
management of the limited liability company unless all of the members of the limited liability company other than the
assigning member approve, or on compliance with the terms of the written operating agreement. An assignee may become a
member on the approval of all of the members other than the assigning member, or on compliance with the procedures set
forth in the operating agreement. The assignee inherits the economic interest of the assigning member, and the assigning
member ceases to have the power to exercise the rights of a member on the assignment of his or her entire interest.
However, the assignor remains liable to make his or her promised capital contributions and retains liability for improper
distributions. A pledge does not constitute an assignment unless the operating agreement provides otherwise.
Please note that the following should not be construed as legal advice. You should consult an experienced
Massachusetts business attorney if you have a specific legal matter that needs to be addressed. Contact us today at
(800) 719-4889 if you need help with your Massachusetts business matter (you can read about our lawyers and
professionals here). Please review our main business law page if you have additional questions about the process of forming
a business entity in Massachusetts.
Massachusetts Limited Liability Companies
A limited liability company is a business structure organized under an enabling statute that offers both limited liability for
participants and "pass through" treatment for tax purposes. For both federal and Massachusetts purposes, limited liability
companies may elect to be taxed either as partnerships or as corporations. A limited liability company may be managed by its
owners (member-managed) or may be managed by a manager (manager-managed), who may be a member or a nonowner.
Statutory Requirements for Formation
A limited liability company is organized by the execution and filing of a certificate of organization with the Massachusetts
secretary of state together with the filing fee of $500.
Control and Management
Limited liability companies are not required to have operating agreements. However, in the absence of an operating
agreement governing issues of management and control, the Limited Liability Act has certain default provisions that will
automatically control the relationships of the members and the managers.
The extreme flexibility permitted for operating agreements allows practitioners to design entities suited to their clients'
purposes. Limited liability company operating agreements may create structures similar to limited partnerships in which the
management and control of the enterprise are delegated to a manager operating independently of the members; may
design entities similar to corporations in which members elect a board of managers, whose terms are limited, to manage the
enterprise; or may create forms similar to general partnerships in which all of the members have an equal say in the
management of the enterprise.
Regardless of whether a member participates in the management of the limited liability company, however, he or she is
entitled to information concerning the business and financial condition of the limited liability company; its federal, state and
local tax returns; and certain other information.
Liability
Members and managers of a limited liability company are generally free from personal liability for the debts and obligations of
the company. However, except to the extent otherwise set out in the operating agreement, members are obligated to the
limited liability company for promised contributions of property or services and may be liable to creditors if they advanced
credit to the limited liability company in reliance on the obligation of the member to make contribution.
Continuity of Existence
If so stated in its operating agreement, the life of a limited liability company can be perpetual (subject to rights of its
members or managers to judicial dissolution), or it can terminate on the occurrence of events specified in the operating
agreement. In the absence of a dissolution date specified in the operating agreement, a limited liability company terminates
on the earlier to occur of (1) the written consent of all of its members; (2) the death, insanity, retirement, resignation,
expulsion, bankruptcy or dissolution of a member; (3) the occurrence of any other event that terminates the membership of a
member in the limited liability company, unless the business is continued by vote of all remaining members within 90 days
after termination event; or (4) judicial dissolution.
Transferability of Interests
Subject to federal and state securities laws, a limited liability company's interest is assignable, in whole or in part, unless
otherwise provided in the operating agreement. However, an assignee of an interest has no right to participate in the
management of the limited liability company unless all of the members of the limited liability company other than the
assigning member approve, or on compliance with the terms of the written operating agreement. An assignee may become a
member on the approval of all of the members other than the assigning member, or on compliance with the procedures set
forth in the operating agreement. The assignee inherits the economic interest of the assigning member, and the assigning
member ceases to have the power to exercise the rights of a member on the assignment of his or her entire interest.
However, the assignor remains liable to make his or her promised capital contributions and retains liability for improper
distributions. A pledge does not constitute an assignment unless the operating agreement provides otherwise.