LLC Limited Liability Company
• Can be single owner or multiple
• Flow through taxation
o Tax it as partnership
o Or taxed as a corporation
• Benefits is that the LLC has a limited liability which frees the personal liability of wrongs
committed by others.
• Will not excuse the owner for something she/he personally commits.
• More difficult to dissolve
• Contract on how business is to be operated and member’s rights.
Meeting Legal Requirements
• Can be profit or non-profit
• Corporation is a legal entity just like the limited partnership & LLC
• Most child care programs are LLC’s or corporations
• Corporations have a board
• The board typically delegates decision-making power to a manager or director.
• Board members are typically protected for their good faith “business judgement rule”
• Individual board members can be held liable for their own personal wrongdoing; such as
• Diminished personal financial liability
• Subchapters: “S” or “C”; less corporate taxes with S
Documents That Need to Be Filed for A Corporation:
1. Articles of incorporation or certificates of incorporation
3. Minutes of the incorporations’ meeting
• For profit pay taxes on profits; profits can come back to owners as dividends.
• Non-profits can have a surplus or net income; but that income needs to stay in the
business and be utilized to promote purposes set forth in the articles of incorporation.
• Careful record keeping is necessary personal and business records must be kept separate
from each other.
• Non-profits are usually required to file an audit and annual financial reports.
Meeting Legal- Corporations
• Franchises & Chains definitions:
1) Franchise is an organization that allows an individual or an entity to use its name,
follow a standardized program and administrative procedures and receive
assistance. (like Kiddie Academy & The Learning Experienc