Legal Question in Business Law in Colorado

Re: LLC Membership

Louise Aron

Attorney at Law

Lakewood Office:

1536 South Ingalls

Lakewood, Colorado 80232 USA

(303) 922 7687

fax (303) 922-1370

Cherry Creek Office:

300 South Jackson #100

Denver, Colorado 80209 USA

(303) 780-7339

Satellite offices:

Boulder - 4450 Arapahoe Avenue, #100

DTC - 4610 South Ulster, #150

A TOLL FREE NUMBER is available to clients outside the Denver metro area.

web site http://effectnet.com/la/

[email protected]

LawGuru User

Dear LawGuru User:

Frankly, you sound a bit confused between a corporation and an LLC. Hopefully, you are not "doing it yourself" in setting up your LLC. All business entities have certain legal requirements which determine their validity under the law.

Usually, LLC members receive a percentage interest in an LLC, much like partners do in a partnership. The interest may be transferable, or not, depending on the terms of the Operating Agreement between the members of the LLC, and pursuant to Colorado law. If you have an Operating Agreement, read through it and determine what, if any, provisions pertain to sale of a member's interest. If you don't have such an Agreement, have one drafted by an attorney.

Usually, one's LLC interest cannot be transferred without consent of the other members of the LLC.

You ask whether "small lot sizes" should be used. Are you referring to real estate or shares? Again, if you are talking about shares you are referring to a corporation, not an LLC.

I try whenever appropriate to have my clients form Subchapter S

Corporations rather than LLC's. Subchapter S Corporations are often the most flexible and desirable business entity for the small businessperson. If you have not formed your LLC yet, you may wish to consider a Subchapter S Corporation, or check with your CPA, who may also have a recommendation as to entity choice.

Thank you for contacting LawGuru.

Sincerely,

Louise Aron