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Limited Liability Corporate (LLC) or Partnership
Forming a business may be as simple as shaking another individual's hand or it may be a complex process of filling out forms, paying application fees and taking steps to achieve compliance. The degree of complexity will be shaped significantly by the nature of one's chosen line of business. This, in turn, will define the legal definition of this business. In the discussion hereafter, we consider these distinctions as they apply to a Limited Liability Corporation (LLC) or a partnership.
Limited Liability:
The Limited Liability Corporation is a popular path for many small businesses beginning operations. This is a course to formation frequently taken by companies wishing to formally register as a business but also wishing to protect participants from many of the perils that inherently accompany starting a business. In exchange for these protections, the LLC requires a process of application. According to Carter (2010) "LLCs are required to file articles of organization, also known as a certificate of formation, with the secretary or department of state where the LLC operates. An LLC's articles of organization contains general information about the business, such as the legal business name,...
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For many who participate in this type of company, an LLC is a particularly attractive option because of the safety it affords those involved. The implications of 'limited liability' are that legal or civil matters arising from involvement in the business can only penalize the personal holdings of participants to a certain ceiling. According to the text by Carter, "members of an LLC are not personally responsible for business debts and obligations. Each member of the LLC is liable for business lawsuits and other obligations only to the extent of their ownership interest in the company."
This may be especially attractive to entities entering into a business engagement with other entities who are materially unknown to them. In such scenarios, it is not uncommon for partners to find ways to mitigate the potential risks of this unfamiliarity by forming around the right legal protections.
Partnership:
By contrast to the formal channels required for the formation of an LLC, a partnership is more organically initiated. According to Carter, "A partnership begins automatically when two individuals agree to operate a for-profit business with…
Works Cited:
Carter, C. (2010). Limited Liability Corporations vs. Partnerships. Small Business Chronicle.
Keshav Lal. (2005). LLC v. Partnership. Accountant4me.com.
LegalZoom. (2008). Comparing an LLC to a Sole Proprietorship and a Partnership. LLCs Education Center.
Forming a Partnership Explain the role of agency your business association Agencies play a key role would play a key role in my limited liability company. In the local business context, different states have put different qualifications for an organization to work as an agency. There are a number of registered agencies in the local context. Most of the agencies are found within the local context of the state because an agent
This was followed by the enactments by House of Lords in 1897 in Solomon v. Solomon & Company. The concepts of corporate entity and limited liability were incorporated in English law in the same period. In this case, the head court announced that a company is a separate legal individual completely different from the members or shareholders. From this announcement, we can say that a company is a separate legal
" Since their inception, a number of LLC statutes have been adopted across the country and becaue of the RULLCA initiative, the various jurisdictional disparities are slowly being replaced with more uniform approaches and interpretations. According to Greubner, LLCs have "evolved [into] a more of a distinct form and less of a hodgepodge of existing corporate and limited partnership rules." The LLC, though, remains a relatively new governance regime compared to the
AC-corporation would best serve these concerns. Your current sole proprietorship has plenty of profit to warrant the expense of a more complex form of business. You're also taxed at the highest personal income tax rates. Your sole proprietorship leaves you wide open for liability problems putting all your personal assets at risk along with your business assets. Transforming to a corporation you'll need to still carry sufficient insurance but any losses
Dream Business My dream business would be a German Bakery that sells traditional German Bakery and Cafe. I would call it "Heidi's German Bakery and Cafe." I would open the business together with a German nephew of mine who has worked for over 25 years as a master baker in the Heidelberg bakery of my German relatives. The third member of the business would be an American baker who received his
However, liability is limited to the corporation and offers owners' limited personal liability, which is something that is not found in a sole proprietorship or partnership (Corporation: Definition, Formation, Maintenance, 2012). Furthermore, a corporation is also considered to be a stand-alone entity that has separate tax liabilities; as such, the corporation is responsible for paying corporate taxes on any of the profits the company makes, however, each employee is