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An LLC's Period Of Existence
In most states, an
LLC can either be a term company or an at-will company. A term company
has a specified number of years designated for its “term,” or
lifespan. For example, a term LLC can state in its articles that the
term is
to be “25 years from the date of filing of the Articles of Organization,” or
the Articles can designate a specific future date, such as January 8, 2050. A
term company that continues to do business past its term will become an at-will
company.
An at-will company does not specify a term. Instead, the company will operate
indefinitely. In an at-will company, the dissociation of a Member (owner) of
the LLC will dissolve the LLC unless a specified percentage of the remaining
members agree to continue the business of the company. The specified percentage
of members that are required to approve the continuation of the business should
be indicated in the operating agreement of the LLC.
Although a term company has a designated length of existence (which, as indicated
above, does not in itself
end the company), the term company’s existence will not be affected by
the withdrawal or disassociation of one of the Members.
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