Introduction:- Limited liability Company is a popular form of a company as one can limit the liability of sole proprietors or partners by establishing the company as limited liability company. This form of business is taken up as companies grow and expand, or in cases where individuals seek to magnify the scope of their businesses and seek to consolidate their comparative business standing…
This stipulation becomes of significant value when the company defaults or files for bankruptcy subsequently initiating a liquidation process. 2) Auditing Ease: - Limited liability companies require much less paperwork and bookkeeping than corporations. Also some of the standard laws of the company’s ordinance applicable on corporations do not apply on limited liability companies such as annual general meeting, appointment of directors, annual reports, etc. 3) Advantageous Tax Treatment: - A limited liability company has the privilege of being taxed as a sole proprietorship, partnership or a corporation. This fact is of significant value as several entities may chose different options depending on the state tax laws in place. 4) Avoiding Double Taxation: - Unlike corporations, Limited liability companies do not have to face double taxation, although the shareholders have limited liability. In corporations, taxes are applicable at the corporate level first and then at the shareholder level. Such is not the case with a limited liability company (Jitman, 2009). ...
This fact does not allow a limited liability company to gauge loans or investments easily as most lenders seek personal assurances in case of default which defeats the purpose of LLC. 2) Managerial Difficulties: - This new form of the business organization is understood by most stakeholders involved initially which results in managerial difficulties in determining the chain of command to people within and outside the organization. Creditors are reluctant to lend as they do not quite understand who is responsible. (Mclaney, 2009) Partnership Introduction: - A partnership is an association of individuals or an unincorporated company that is formed by two or more persons, created by agreement along with proof of existence and personal liability of owners in case of default or liquidation of the company (Mclaney, 2009). Partnerships are characterized by intricacies in terms of defining relationships between partners themselves and relationship of the partnership company among the outside world. The problem of relationship between the partners is sorted out with a legal binding contract that lays down the framework of the company along with individual and collective responsibilities. Members in a partnership can stretch from 2 to 20 depending on the need of capital and other necessities of the business (Jitman, 2009). The assets of a business are owner by the partners and the partners are jointly or severely responsible for fulfilling liquidation clauses and terms in case of default, including keeping their personal assets at stake for paying creditors. Each partner is deemed to be an agent of the business hence if a partner is carrying out business related ...
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(Limited Liability and Partnership Corporation Essay)
“Limited Liability and Partnership Corporation Essay”, n.d. https://studentshare.net/finance-accounting/41358-limited-liability-and-partnership-corporation.
This is because it requires a delicate balance of ideas and arrangement such that both partners agree to co-operate with each other and advance their mutual interest (Wood 21). A common ground is often established within which the two parties work together while at the same time achieving their own goals.
Limited liability means that if the business goes six feet under and fails the owners of the corporation are not personally liable for the debt that is left behind (Allbusiness, 2011). Under other business structures such as sole ownership the owners have to pay for the entire debt that the business leaves behind.
This paper seeks to explore the two forms of business organizations. The paper will discuss the nature of the organizations that define their roles as well as advantages and disadvantages that are associated with the two forms. Limited liability partnerships and their roles A limited liability partnership is a special type of partnership in which partners’ liabilities are limited to their responsibilities.
Name Course Course Instructor Date Limited Liability Partnership As a young entrepreneur, I intend to start a technology business, which deals with creating a social network intended for the people. The aim of my business will be to give the public a social networking establishment that will allow people to communicate all over the world.
The Limited Liability Partnerships Act 2000 is an Act of Parliament which introduced the concept of the limited liability partnership into English and Scottish law (wikipedia.com).
In the Limited Liability Partnership Act 2000 the following provision is included in this act; A Limited Liability Partnership has unlimited capacity.
Now the question arises that what does responsible by law means for the partner's deeds. It means that when a business is being conducted by a group of persons in the form of partnership then they have to pay for all the liabilities, debts and loans which were taken by their partner and that they cannot be relieved of their this responsibility on the defense ground that they are not responsible for the actions of others conducting business along with them.
The paper will detail and analyze the need for a change in the LLP law to make it more effective in terms of functioning for both the state and the business as such.
Unlimited partnership has been the form of business for many years for professionals especially in the case of chartered accountants, lawyers, architects, vetenarians and many other professionals.
LLC is an ideal choice for those business owners who would like to take advantage of tax benefits offered thereof, while also able to install an organizational structure resembling a private or public corporation.
One of the key advantages of limited liability
focuses on briefly discussing the other types of businesses which would build a basis for the next section of the paper were the core discussion regarding Limited Liability Partnerships would take place. This paper would start by discussing the simplest form of business, which