Comparison Between the Limited Liability Company and the Limited Partnership

Only available on StudyMode
  • Download(s) : 179
  • Published : November 14, 2011
Open Document
Text Preview
Business Law

Comparison between
The Limited liability Company
And
The Limited Partnership

The Limited Liability Company

Definition
A limited liability company (LLC) is a flexible form of enterprise that blends elements of partnership and corporate structures. It is a legal form of company that provides limited liability to its owners in the vast majority of United States jurisdictions. LLCs do not need to be organized for profit. Often incorrectly called a "limited liability corporation" (instead of company), it is a hybrid business entity having certain characteristics of both a corporation and a partnership or sole proprietorship (depending on how many owners there are). An LLC, although a business entity, is a type of unincorporated association and is not a corporation. The primary characteristic an LLC shares with a corporation is limited liability, and the primary characteristic it shares with a partnership is the availability of pass-through income taxation. It is often more flexible than a corporation and it is well-suited for companies with a single owner.

Legal Capacity
In this case the capital of the company will be divided into equal parts, the value of each part is not less than L.E. 100. Accordingly, every partner has to contribute to the capital of the company. Contributions to the capital are not represented by shares but by parts. These parts are not negotiable such as the case of shares. So, as per the law provisions (part 4 of the Companies Law), the foundation of a limited liability company, or increase of its capital, is not permissible through public subscription moreover, the issuance of negotiable shares is not allowed. Similarly, as in the case of the Partnerships Limited by shares, the Limited Liability Companies are not allowed to undertake insurance, banking, savings, taking of deposits or investment of funds to the account of other parties.

Management
The liability of each partner towards the company is limited...
tracking img