Limited Liability Company FAQs

LIMITED LIABILITY COMPANY FAQs! 

There are many questions that face a business owner of a limited liability company (LLC).  From formation to maintaining the business formalities with the Secretary of State and to paying taxes (both federal and state!) – there are too many questions to ask if you own a business.  The issues are limitless.  But if you own an LLC, the most common initials questions that you must address include the following:

Do I need an operating agreement for my limited liability company?

An operating agreement governs the relationship between members of a Limited Liability Company (LLC). It is similar to the Bylaws in a Corporation. Typically, LLCs are highly advantageous for business owners. They provide the same liability protection as corporations without requiring board meetings, corporate record keeping, or other tedious paperwork and events.  Although an operating agreement is not legally required, it is necessary to set out the rights & obligations amongst the members as it relates to the operation of the business.  

Are there AB5 LLC exemptions that apply?

California Assembly Bill 5 (AB5) requires companies that hire independent contractors to reclassify them as employees.  But there are several exemptions in AB5. More than 50 professions & types of businesses are exempt, including insurance agents, attorneys, real estate agents, & certain types of business-to-business contractors.

Do I need a business lawyer?

You may have penalties if you misclassify workers as independent contractors.  When hiring an independent contractor it is best to consult with an experienced attorney.  Carefully drafted independent contractor agreements are required which outline the duties & obligations of the parties.  Call The Sterling Firm to Speak With An Experienced Lawyer or Book Your Consultation HERE!