Limited Liability Corporation and Partnership Paper
A basic idea starts every business. When starting a business, a decision has to be made as to what form of business entity needs to be established. Protection and capitalization of the business must also be established, with the most basic question being what type of entity should be used when moving forward with the business. There are many different factors that have to be considered when making this decision. The most similar type of business is the partnership, sole proprietorship, S corporation, and corporation. A Limited Liability Company (LLC) is a new business structure allowed by state statute. When establishing a new business, limited liability corporations and partnerships play a huge role. Limited Liability Corporations
Limited liability corporation or company is a “relatively recent type of US business structure that combines the limited personal liability feature of a corporation with the single taxation feature of a partnership or sole-proprietorship firm” (Business Dictionary, 2011). Its tax benefits and profits are split any way the shareholders or stockholders want. Tax return for a limited liability company is filed with the taxation authorities only for the purpose of information, and each shareholder files own tax return separately. Limited liability companies are a type of business ownership combining several features of partnership and corporation structures is not a partnership or a corporation may be called a limited liability corporation, the correct terminology is limited liability company owners are called members not partners or shareholders number of members are unlimited and may be corporations, individuals, or other LLC’s. Some advantages of a limited liability company are that owners of a LLC have the liability protection of a corporation. A LLC exists as a separate entity much like a corporation....