What Gives an LLC Authority to Operate?
pThe law of each state affordsnbsp; people the opportunity tonbsp;runnbsp; a business in one of several different legal structures or forms. For example, if you want to a href=http://www.incsource101.com/idahoincorporation/index.html target=_blankform an LLC in Idaho/a, then the law of Idaho governs. Each form has its own advantages and disadvantages depending on the individual circumstances of the owners. The most basic and simple form is the sole proprietorship which involves business ownership by one person or in some cases by husband and wife.nbsp; Other forms include a partnership, limited partnership, regular or C corporation, S corporation, Limited Liability Company (LLC)nbsp; or Limited Liability Partnership (LLP).nbsp;a href=http://www.incsource101.com/idahoincorporation/index.html target=_blankIdaho LLC incorporation/a./p
pCorporations have sometimes been called legal fictions, meaning they exist only because the state law authorizes their existence.nbsp; Corporations were first authorized by state laws to provide a form of doing business where a person could invest money in a business venture without subjecting their personal assets or property to liability. Corporations are considered legal entities, separate and apart from the shareholders or people who own them. Thus, if a corporation is sued and a judgment from a court is rendered against the corporation, the law allows the judgment holder to satisfy the judgment (get paid) only from the assets or property of the corporation and not the private property of the individual shareholders. This corporate attribute is called limited liability protection.nbsp; In a sole proprietorship or partnership, a judgment can be satisfied from the personal property of the individual owners of the business if there are insufficient business assets to satisfy the judgment.nbsp; a href=http://www.incsource101.com/LLC/setupllc.html target=_blankSetting Up an LLC/a/p
pNot only do corporations and LLCs owe their existence to state law, but they are also governednbsp; and regulated by the corporate or LLC laws of the state in which they are incorporated and/or in which they choose to do business.nbsp; (Note: if a corporation sells stock, it may also be regulated by state and federal securities laws)/p
pThe corporation laws for many states can now be found on line.nbsp; If you need to review the corporate law in your state, the following sources may help./p
