Advantages and Disadvantages of Limited Liability Companies :

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The right business structure is vital for business. The following advantages and disadvantages of a limited liability company (LLC). LLC is a new kind of commercial purposes. First LLC in the United States was Wyoming in 1977. In 1980, the IRS issued a private show and treated by the Court LLC, a partnership for tax purposes.
LLC provide limited protection to members by reducing personal responsibility. Members are not personally liable for the debts and liabilities of the company. Creditors cannot pursue its members’ personal assets (e.g. house or car) to pay business debts.
LLC can be taxed in several ways – as a pass-through entity, association or corporation.
An LLC is a “flow-through entity – which means that the LLC has no income tax, he passed through the members.
The formation of an LLC is flexible. An LLC may be formed as a unit to appear as a partnership or a corporation based on the preferences and needs of the person creating businesses.
Style management requirements easy to meet for an LLC is less formal compared to a company.
Because the LLC is a separate entity, a new credit profile that is separate and distinct from a personal credit profile.
Having the “LLC” in the name of your company improves your company’s credibility with suppliers, partners and potential customers.
Easy transfer of ownership.
An LLC is not limited to a maximum number of shareholders.
LLC attract investors more easily than a sole proprietorship.
Business – nuisances
Together, the advantages of setting up a limited liability company (LLC), has drawbacks. Disadvantages of the LLC are:
LLCs still an option for many countries. Wyoming and Florida, states only that the LLC structure before 1990. Since this is a relatively new option, the institution LLC is still evolving and there is very little history, before the courts.
In some states, an LLC have limited life – no more than 30 years.
Interstate business is more complex. LLC laws vary widely from country to country. LLC is formed for each state in which the company conducts its business. Every state requires the completed forms, in particular to their condition. Every country needs an application for fees constitute LLC. These fees vary from state to state. Registration fees range in price from $ 50 to $ 500.
Many states impose ongoing fees for the LLC as an annual report and / or tax services franchise. Alabama, California, Kentucky, New York, Pennsylvania, Texas and Tennessee and collect a franchise tax on LLCs.
The transfer of ownership is more difficult to transfer to a corporation.
An LLC also be cheaper and easier to understand a business, but they are more complicated and more expensive than setting up a partnership.
The money invested, LLC is limited. The money that is invested in the LLC to become members and members cannot raise capital from external sources of capital to the company.
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Yasir Samad has 1033 articles online and 457 fans

Yasir Samad is a head marketing and SEO consultant for Hilal Technology. Hilal Technology provides a wide range of SEO and website design services.

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Advantages and Disadvantages of Limited Liability Companies :

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This article was published on 2011/05/18