Which of the following statements is true concerning LLCs?

Limited Liability Companies (LLCs) offer considerable flexibility in how profits are distributed among their members, which is why the statement regarding the flexibility in distributing profits is true. This feature allows members to decide how they want to allocate income, rather than following a rigid structure based solely on ownership percentages. This is especially beneficial for small business owners who may want to reward certain members differently based on their contributions or other agreed-upon factors.

Unlike corporations, which must adhere to specific statutory rules about profit distribution, LLCs provide this discretion, adapting to the members’ agreements. This means that an LLC can create customized profit-sharing arrangements that reflect the unique circumstances and relationships among its members.

In contrast, having unlimited life spans is not inherently true for LLCs, as their existence can be terminated based on the agreement of members or other parameters. Additionally, members of an LLC enjoy limited liability, meaning they are generally not personally liable for the debts of the business. Lastly, LLCs can have one or multiple members, so the statement that they cannot have more than one member does not hold. The dynamic structure of LLCs makes them a popular choice for many business owners seeking flexibility and protection.