Limited Liability Corporation and Partnership Paper
Running Head: Limited Liability Corporation and Partnership Paper
Limited Liability Corporation and Partnership Paper
University of Phoenix
Michael Charley
FIN/419 - FINANCE FOR DECISION MAKING
Finance
05/17/2011 - 06/20/2011 Instructor: TONY MOSES
In today’s economy there are many decisions business owners have to make in order for their business to sustain and grow. With that being said, business owners are now looking at the operations and structure of their business more frequently and carefully. Deciding location, the type of business, the finances to operate this business, has become a bigger decision when it comes to wanting to develop an operating business. This paper will define Limited liability corporations and partnerships, and explain roles of limited liability corporations and partnerships. This paper will then provide information based on my evaluation on what circumstances would I choose one instead of the other?
When we think of limited liability, we think of companies that are not liable or that are not legally responsible for their actions. An article stated that, “A limited liability company (LLC) is a business structure allowed by state statute. LLCs are popular because, similar to a corporation, owners have limited personal liability for the debts and actions of the LLC. Other features of LLCs are more like a partnership, providing management flexibility and the benefit of pass-through taxation.” (IRS, 2011) “Limited Partnerships are business organizations with one or more general partners, who manage the business and assume legal debts and obligations, and one or more limited partners, who are liable only to the extent of their investments. Limited partners also enjoy rights to the partnership's cash flow, but are not liable for company obligations.” (Investor Words, 2011)
To go more in-depth of what a limited liability corporation and partnership is; “Limited liability partnership (LLP) or sometimes called a registered
Limited Liability Corporation and Partnership Paper
University of Phoenix
Michael Charley
FIN/419 - FINANCE FOR DECISION MAKING
Finance
05/17/2011 - 06/20/2011 Instructor: TONY MOSES
In today’s economy there are many decisions business owners have to make in order for their business to sustain and grow. With that being said, business owners are now looking at the operations and structure of their business more frequently and carefully. Deciding location, the type of business, the finances to operate this business, has become a bigger decision when it comes to wanting to develop an operating business. This paper will define Limited liability corporations and partnerships, and explain roles of limited liability corporations and partnerships. This paper will then provide information based on my evaluation on what circumstances would I choose one instead of the other?
When we think of limited liability, we think of companies that are not liable or that are not legally responsible for their actions. An article stated that, “A limited liability company (LLC) is a business structure allowed by state statute. LLCs are popular because, similar to a corporation, owners have limited personal liability for the debts and actions of the LLC. Other features of LLCs are more like a partnership, providing management flexibility and the benefit of pass-through taxation.” (IRS, 2011) “Limited Partnerships are business organizations with one or more general partners, who manage the business and assume legal debts and obligations, and one or more limited partners, who are liable only to the extent of their investments. Limited partners also enjoy rights to the partnership's cash flow, but are not liable for company obligations.” (Investor Words, 2011)
To go more in-depth of what a limited liability corporation and partnership is; “Limited liability partnership (LLP) or sometimes called a registered