Question

Mandy is looking to set up her business as an LLC. Which of the following statements correctly describe a Limited Liability Company to Mandy?

1) A Limited Liability Company provides limited liability protection to its owners, known as members.
2) A Limited Liability Company is a separate legal entity from its owners.
3) A Limited Liability Company can have an unlimited number of members.
4) A Limited Liability Company is required to hold annual meetings and keep minutes of those meetings.

Answer 1

A Limited Liability Company (LLC) provides limited liability protection to its owners, is a separate legal entity from its owners, can have an unlimited number of members, and is not required to hold annual meetings or keep minutes.

Step-by-step explanation:

A Limited Liability Company (LLC) is a business structure that provides limited liability protection to its owners, known as members. This means that the owners of an LLC are not personally liable for the debts and obligations of the company. Only the assets of the company itself are at risk.

An LLC is considered a separate legal entity from its owners. This means that it has its own legal rights and responsibilities, and can enter into contracts, own property, and be sued.

An LLC can have an unlimited number of members, although it can also be formed with just one member. Members can be individuals, other LLCs, corporations, or even foreign entities.

An LLC is not required to hold annual meetings or keep minutes of those meetings, unlike corporations that typically have these requirements.