Which entity is described by articles of organization, no limit on members, direct management, and limited liability?

Which entity is described by articles of organization, no limit on members, direct management, and limited liability?

• A. General Partnership
• B. Limited Liability Company
• C. S Corporation
• D. C Corporation

Answer: (B)

This describes a Limited Liability Company. Using articles of organization is the filing that creates this type of entity. An LLC can have no practical limit on members, including individuals and other businesses. It offers flexible management: members can run the business directly (member-managed) or appoint managers to run it (manager-managed). Importantly, it provides limited liability, meaning members are generally not personally responsible for the company's debts or liabilities. General partnerships expose partners to personal liability and don’t rely on articles of organization. Corporations (S or C) provide limited liability too, but they are formed with articles of incorporation and typically follow a more formal governance structure with a board of directors and officers, rather than direct, all-member management. S corporations also face ownership restrictions, while C corporations have a different regulatory framework.

This describes a Limited Liability Company. Using articles of organization is the filing that creates this type of entity. An LLC can have no practical limit on members, including individuals and other businesses. It offers flexible management: members can run the business directly (member-managed) or appoint managers to run it (manager-managed). Importantly, it provides limited liability, meaning members are generally not personally responsible for the company's debts or liabilities.

General partnerships expose partners to personal liability and don’t rely on articles of organization. Corporations (S or C) provide limited liability too, but they are formed with articles of incorporation and typically follow a more formal governance structure with a board of directors and officers, rather than direct, all-member management. S corporations also face ownership restrictions, while C corporations have a different regulatory framework.