CFD 3250 Lecture 23: LLC Limited Liability Company

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Child and Family Development
CFD 3250
Victoria Voland

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 fraud. • 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 2. Bylaws 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
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