|Re: Limited Liability Company||<– Date –> <– Thread –>|
|From: Randi Baird (dunevineyard.net)|
|Date: Sun, 28 Feb 1999 20:23:30 -0700 (MST)|
>A small group here in Chicago is exploring the possibility of buying a 6 >or 8 flat together. Some members had heard that there were abvantages in >forming a limited liability company in term of negotiating a mortage with a bank. > >I would appreciate any feedback from those who have had experience with >llc's -pluses and minuses. Island Cohousing, located on the island of Martha's Vineyard in Massachusetts, was formed as a Limited Liability Company (LLC) two years ago. We're currently organized for the purpose of buying and developing land (16 detached units and a common house). We're also in the process of revising our existing LLC Operating Agreement (a.k.a. By-laws), so that once we move into our community our LLC will act as a homeowner's association in order to properly manage the affairs of the community. We initially considered becoming either a LLC or a Limited Liability Partnership (LLP) over a typical for-profit corporation because the LLC/ LLP provided greater flexibility regarding how we could structured the governing body within the Operating Agreement (i.e. member households v. elected or appointed representatives) and the decision making process (i.e. consensus with a fall-back vote v. majority vote), as well as shielding the members from liability. We chose the LLC over the LLP because members owning corporate shares v. partnership assets seem to work more easily. We've been able to create an LLC - Operating Agreement that has met the needs of the bank(s) that we've secured a construction loan(s) from (Martha's Vineyard Cooperative and the Cape Cod Five), while providing our community with an appropriate governing structure and decision making process. We've also incorporated the delegation of certain management responsibilities/ decisions to various committees. Once we move into our community in the spring of 2000 the LLC will change from a developer to a homeowner's association. In our neck of the woods, appraisers and therefore banks seem to shine on homeowner's associations rather than condos. As a group, Island Cohousing feels strongly about legitimizing a governing structure and decision making process that reflects our community's values and that is more practical. If you're interested in our existing development LLC Operating Agreement or a copy of the draft homeowner's association LLC Operating Agreement contact me at: aquinnah @vineyard.net. Philippe Jordi, Island Cohousing Randi Baird email: dune [at] vineyard.net
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