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What is a Limited Liability Company?
A Limited Liability Company (“LLC”) is a form of legal entity created through an agreement between owners who then file a charter with the relevant state secretary of state (e.g., the Washington Secretary of State). The LLC charter is typically very sparse and does not contain nearly as much information as required for a corporation filing. Instead, owners (members) of an LLC enter into a private contract that describes the interoperability between the different owners of the company (e.g., how management decisions are made or how profits are distributed). In Washington, an operating agreement can be either oral or written, with written (obviously) preferred. Regarding taxation, unlike the default taxation regime of a corporation, profits and losses are passed through to the member for taxation purposes.
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