--- title: "Decoding Legal Mumbo Jumbo: LLCs" description: Confused by LLCs? 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Which of these does my business have and what’s the difference anyways?!?! First, we’ll discuss the terms for LLCs, a popular entity choice. LLC’s typically have one or two types of people. The Members are the people who actually own the business. An LLC *may* also have Managers, who are agents of the business and have authority to sign contracts and such for the business. Managers typically are involved in the actual operations of the business. The authority that a Manager has can be restricted. Restrictions can range but some common restrictions prevent the Manager(s) from merging with another business and taking on debt of a certain amount without Member approval. The same people can be Members and Managers. Are you with me so far?  Great, because we’re going to make it a little more complicated. LLC’s are flexible so an LLC can also be structured like a corporation with Officers and Directors. We’ll be discussing the corporate terminology in a later installment. Even if an LLC is structured like a corporation, the owners will still be called Members.   When forming an LLC, Articles of Organization or a Certificate of Organization is filed with the Secretary of State. Different states use different terms for this document. However, it typically states the LLC name, the principal office of the LLC, and the initial registered agent, among other things. An operating agreement is not required but strongly recommended. An operating agreement states the basic organizational matters such as the name, principal office, and initial registered agent. It also includes financial matters of the company, such as how the LLC is taxed, how profits and losses are allocated among the Members and whether distributions are mandatory or discretionary. An operating agreement may also restrict the ability of member’s to sell their shares, similar to a buy-sell agreement described more in depth [here](https://blog.goosmannlaw.com/ceo-on-your-side/buy-sell-agreement-pt.-1-whats-a-buy-sell-agreement-and-why-would-i-need-one). Those are the basic terms to know when discussing an LLC. To form an LLC or draft an operating agreement or buy-sell agreement, contact one of our business attorneys in our Sioux City, Sioux Falls, or Omaha locations. 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