University of Wisconsin Center for Cooperatives
Journal of Cooperatives
INVITED PAPER


Title The Impact of LLCs on Cooperatives: Bane, Boon or Non-Event?
Author(s) Donald A. Frederick
Series Volume 13
Issue Date 1998
Abstract In recent years, every state has enacted laws enabling businesses to operate in a new form known as the limited liability company (LLC). Recent changes in the way the Internal Revenue Service (IRS) treats LLCs for tax purposes has increased their appeal. Interest in using the LLC model to organize multi-owner businesses is growing so rapidly that some cooperative champions are wondering if this new kid on the block will deliver a knockout blow to cooperatives. Others see it as an exciting new tool to  further cooperative enterprise This article discusses the characteristics of LLCs, provides some background on their evolution, compares them to other ways of structuring a business, and looks at the challenges and opportunities they offer rural residents and their cooperatives.

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