A Virginia limited liability company (Virginia LLC) is a limited liability legal entity created under the laws of Virginia. Once created, a Virginia LLC is its own legal person separate and apart from its owners. It therefore can act on its own behalf and also must be responsible for its own actions and business activities. The great thing about a Virginia LLC is that it was specicially created to provide business owners with the advantages of the other legal entities without their disadvantages. Because of this, the Virginia LLC has greatly surpassed the corporation as the entity of choice for small business owners in Virginia.

A "Member" of a Virginia LLC is an owner of the Virginia LLC. A Member is to an LLC what a shareholder is to a corporation. Accordingly, the Members of an LLC own membership interests in an LLC.

Ownership interests in a Virginia LLC are usually represented by either issued membership interests or issued membership units. These units of ownership are analagous to shares in a corporation and they represent the ownership rights in the LLC. Membership Interests or Membership Units are personal property.

A "manager" of a Virginia LLC is a person or entity that has been elected by the members of the Virginia LLC to have general authority to manage and operate the LLC business. Not every Virginia LLC has managers. In order to have managers, the Virginia LLC must be manager-managed. If a Virginia LLC is manager managed, the members (owners) of the Virginia LLC usually elect the managers to run the LLC. Sometimes the managers will actively operate the LLC while other times (especially with larger LLC businesses), the managers will actually appoint other persons as officers to run the day to day operations of the LLC. If a Virginia LLC is member managed, then the members act as the managers of the Virginia LLC.

The state of Virgina requires that each Virginia LLC or Virginia corporation have a registered agent properly appointed by the Virginia LLC or Virginia corporation in the state records. A Registered Agent is the official, appointed person who is legally authorized to accept legal papers delivered to the Virginia LLC or Virginia corporation. The Registered Agent must have a permanent physical address located in Virginia where legal papers can be delivered and accepted in person during business hours. IN addition, Virginai requires that the registered agent be either (i) a member of the Virginia LLC or a director of the Virginia corporation; (ii) a Virginia attorney; or (iii) a different legal entity formed in Virginia or legally authorized to conduct business in Virginia.

A Virginia corporation is a fictional entity that is exists only because it is recovgnized as a separate legal person under Virginia state laws. Once created, a Virginia corporation is its own legal person separate and apart from its owners. It therefore can act on its own behalf and also must be responsible for its own actions and business activities. A corporation can live forever if it chooses.

A "shareholder" is an owner of a Virginia corporation. A shareholder owns shares of stock which represent the ownership interests of a Virginia corporation.

Ownership interests in a Virginia corporation are represented by shares of stock in the corporation. The ultimate ownership percentage of a shareholder depends on how many shares he or she owns and how many total number shares the Virginia corporation has issued. Shares of stock in a Virginia corporation are personal property.

A Virginia Corporation is generally required to have a Board of Directors. A Director is a person elected by the shareholders of the Virginia Corporation to serve on the Board of Directors. The Directors are responsible for oversseing the management of the Corporation business activities and making major business decisions on behalf of the Corporation. Directors do have fiduciary duties toward the shareholders of the Virginia Corporation and should be aware of these duties before agreeing to serve as a Director of a Virginia corporation.

The limited liability protection afforded by an LLC basically states that members of an LLC are not personally liable for the debts and liability of an LLC merely because they are a member. Many business owners use LLCs because a properly formed and maintained LLC will protect them as a member in the event the LLC gets sued for business related liability. Please note that you, as a member, can do things that are not covered by this limited liability protection such as personally agreeing to be liable for a debt (like signing a mortgage in your individual capacity) or if you are personally at fault for negligent or fraudulent actions. The LLC provides a baseline blanket of protection between the LLC as an entity and its members only. If you get sued personally and want to protect the assets from the LLC from being taken, you could form a multi-member LLC to own the assets and the creditor who sues you can attach your LLC membership interests to collect on the lawsuit but cannot otherwise require that the LLC sell the assets and cannot control the operations of the LLC. This is known as "charging order" protection. Please note that this is generally only available to MULTI-MEMBER LLCs not single owner LLCs. Finally, when it comes to bankruptcy, federal bankruptcy laws take precedence over state LLC laws so there may be areas in bankruptcy where the bankruptcy trustee can control and sometimes sell your assets including LLC membership interests. We are not bankruptcy experts so you should consult with a bankruptcy attorney to understand the implications