Book Opener

This can be done by obtaining the proper forms from the secretary ofstate’s office. The articles of organization include the following:l The name of the LLC, including either the words limited liabilitycompany, limited, or the abbreviations, LLC or Ltdl The length of time that the LLC will existl The address where the operating agreement and the bylaws of theLLC are storedLike a corporation, an LLC must also have a statutory agent forservice of process. Filing fees must also be paid.Members of a newly formed LLC will often want to draw up anoperating agreement. An operating agreement will set up the bylawsunder which the LLC will operate. Although some states permit oraloperating agreements, it is best to express the terms of the operatingagreement in writing.Incorporation ProblemsStates differ in their interpretation of when the life of a corporationactually begins. Some states declare that the legal existence of a corporationbegins when the articles have been filed. Others hold that acorporation begins when the articles have been approved by the secretaryof state. Whatever the case, assuming that all formalities have beencompleted, once the legal existence of the corporation begins, it is saidto be a de jure corporation. The term means “lawful” or “in law.”Sometimes, however, problems occur that disrupt the incorporationprocess. At other times people fail to incorporate, yet they act as if theyTax Law and NonprofitsNonprofit groups and charities are turning increasingly to the Internet forfund-raising. As they do so, the IRS is preparing to issue guidelines on applyingtax law. These guidelines will have an effect on the taxes paid by nonprofits andcharities on income received through online fund-raising. Charitable groups arealso concerned with being taxed on sales from referring visitors to other Websites, as well as the treatment of their tax exempt status. (Source: New YorkTimes, p. B1, 2/12/01)Connect Visit the Web site of a local or national charity. See what type ofonline activities they engage in that might affect their tax status.Chapter 28: Forming and Financing a Corporation 617