Can a limited liability company purchase risky investments such as crytocurrencies?

DWQA QuestionsCategory: OtherCan a limited liability company purchase risky investments such as crytocurrencies?
mmKathy Green asked 2 years ago

If so, what are the limitations and what would I need to do to overcome them?

1 Answers
mmadmin Staff answered 2 years ago

Most states require the inclusion of a “general purpose” clause in the articles of organization. The general purpose clause includes language such as “the purpose of XYZ, LLC, is to operate as a corporation legally and lawfully in the state of Texas.” This clause shows that the LLC is willing to comply with the tax laws, business guidelines and other operational regulations specified by the company’s home state in exchange for the liability protection granted to the members.

Specific Purpose Statement
Although the statement of a specific purpose is not always required by state laws in the articles of organization, many companies include a more detailed outline of the firm’s mission statement. Also, if the LLC’s mission has a finite time frame, the time limit should be mentioned in this section of the articles. If the company changes its mission substantially during the partnership, the members may be required to refile their articles for state approval.

Nonprofit Purpose Statement
Some states allow nonprofit groups to organize as an LLC rather than as a corporation. For these nonprofit organizations, the statement of purpose can determine whether the agency qualifies for tax-exempt status under Section 501(c)(3) of the Internal Revenue Code. A nonprofit agency that qualifies for tax-exempt status receives a federal exemption from income taxes on its revenue. The statement of purpose must include charitable, religious, scientific, literary or other educational missions to qualify for tax-exempt status.