RESEARCH SECTION: The complex business and legal environment of the global market that exists today requires careful analysis of all aspects of the business/investment potential. For a potential business owner, simply choosing which ownership entity requires both legal advice and tax advice to ensure that you are not exposing your business to unnecessary liability or negative tax implications. The unique characteristics inherent in LLCs, corporations, partnerships and the like can significantly affect your flexibility and structure in the future. Subsequent training of contracts, managers, etc. also involves a significant amount of work and time; and constitutes the subject of this research paper. The intent of this report is to explain and offer an opinion on the disparity between entity formations and the protection they provide (particularly LLCs) between different states in the United States. Additionally, I will analyze and provide my own input on the different fiduciary responsibilities of directors to the associated LLC depending on the state in which the LLC is incorporated (including acceptance of an exculpatory clause and its effectiveness in the event of protest). An LLC (limited liability company) is commonly used in today's business environment for many different reasons1:§ Very few restrictions compared to other ownership entities§ All owners are subject to a “ limited liability” which separates the personal assets of the individual owner from the assets of the LLC3Ø Partnerships must have a management/general partner which is not protected by this provisionØ LLCs may have managing partners; and depending on how the contract is...... middle of paper ...... with a universal act of creation of commercial entity. Even though different states are segmented in such a way that it is more beneficial to fit them into one rather than another, I think that can be said about all sorts of different topics: income tax, state tax sales, social issues, immigration topics, etc. We have the ability to control the direction of far too many issues at this point. Attempting to remove the ability to control very important management, the formation of business entities and exculpatory clauses, would cause serious conflict between states. “Monitoring bytes.” Monitoring bytes. Np, March 24, 2010. Web. December 7.