Enjoy Liability Protection At The Limited Liability Corporation
As the name suggests, Limited Liability Corporation (LLC) is a unique business structure that enables personal or limited liability protection in a corporation. This different limited liability business model has been developed from the GmBH German model.
In the US, certain states allow lawyers and legal practitioners to have limited liability corporations whereas other states stop banks or farms to form such corporations. The operating agreement drafted by all the members denotes the hassle-free operation of the corporation. All of the members can take part in the managerial meeting.
Features
A limited liability corporation has to file the articles of organization with the state’s secretary and must have a registered agent within the state. Originally, there must be at least two members involved in forming the limited liability corporation. An LLC cannot function for more than 30 years. In this period, the death, expulsion, withdrawal or bankruptcy of any one member does not depict the end of the LLC.
Benefits
The limited liability corporation offers taxation benefits along with investment, flexible ownership, management, control and the free flow of profit as well as loss that characterize partnerships. The members are protected from double taxation, which includes company tax and individual tax.
Limited liability requires less formality than a corporation and more formality than sole proprietorship.
Unlike the conventional corporations, the limited liability corporations do not hold its members liable for the debts, losses or bankruptcy of the business unit, unless there are some fraud or personal guarantees. However, the limited liability corporations do not have the option of transferring the membership, single ownership in case there is more than one member, and continual existence.
Different kinds of limited liability corporations (LLCs)
Single member LLC is the simplest business where the sole proprietor owns the business and has personal liability for the debts.
Non-profit type of Limited Liability Corporations cannot issue shares and are made for helping the society. It is formulated for businesses involved in charity, education, religion and science.
Limited Liability Partnerships, LLP, enables accountants and attorneys to function their practices protecting the partners from liabilities. Limited Liability Corporations require paying the income tax on the taxable income earned by the corporation. It offers limited protection to the shareholders. They have less flexibility.
For more infomation on debt and bankruptcy choose from the list below. |
|
|
|
|
|
|
|
Banking - Business Finances - Economics - Insurance - Investing
Major Purchases - Personal Finances - Stock Market - Taxes
|
