Do limited liability companies follow the partnership or corporation model for termination?
Limited liability companies are more fragile than corporate business organizations. As with partnerships, an outside occurrence can signal the end of a limited liability company’s existence. Depending on the state statute, a limited liability company may formally terminate if an owner experiences: Death; Retirement from the company; Resignation from the company; Personal bankruptcy; or Expulsion from the company by the other owners. Once dissolution is brought on by one of these events, the remaining members typically must wrap up the company’s remaining obligations and terminate the organization. However, if two or more members remain, they can avoid termination by agreeing to continue the business. In this case, members should review state limited liability company laws for formal requirements to remain in business.
Related Questions
- Should the S corporation or partnership follow the nonresident withholding procedures when combining investment income as an overall loss?
- Do limited liability companies follow the partnership or corporation model for termination?
- Do limited liability companies follow the partnership or corporation model for dissolution?
