You’ve decided to form a limited liability company (LLC) for your new business venture - congratulations. Now you must make a few key decisions about the LLC, such as choosing the state of formation and filing to register your entity. As we discussed in an earlier post, another basic step in the formation process is drafting an operating agreement (also known as an LLC agreement) which will include important provisions relating to the management and ownership of the business.

When forming a new business, a founder must make several important decisions upfront including what type of legal entity to select. Choosing the appropriate legal structure requires consideration of issues such as ownership structure, liability, profit distributions, tax treatment and capital raising, to name a few.