Preview

Limited Liability Corporation and Partnership Paper

Good Essays
Open Document
Open Document
965 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
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

You May Also Find These Documents Helpful

  • Powerful Essays

    Week 6 You Decide

    • 1981 Words
    • 6 Pages

    Partnerships are commonly organized as General Partnerships, Joint Ventures, or Limited Partnerships (limited liability). For the purposes of this memo, we will stick to forms of Limited Partnerships as the current economic climate necessitates a business structure that limits the liability of its owners. Common forms…

    • 1981 Words
    • 6 Pages
    Powerful Essays
  • Good Essays

    3. Limited Liability Partnership (LLP): Partnership structure used in today's world. In the LLP all Partners have Limited Liability whether a General Partner or Limited Partner. You still have the classification of General and Limited because someone (General Partner/s) is designated to make decisions. The IRS wants to know for tax purposes.…

    • 3783 Words
    • 16 Pages
    Good Essays
  • Good Essays

    Chapter Six

    • 1050 Words
    • 3 Pages

    4. A limited partnership is a form of partnership similar to a general partnership, except that in addition to one or more general partners (GPs), there are one or more limited partners (LPs).…

    • 1050 Words
    • 3 Pages
    Good Essays
  • Good Essays

    A partnership is very similar to a sole proprietorship, but with more than one owner. There are two types of partnerships: general partnerships and limited partnerships. In a general partnership, each partner is fully responsible and liable for the business and the acts of the partners. A partnership agreement dictates the relationship between the partners and can be either oral or written. In a limited partnership, one or more of the partners has limited liability, restricted to the amount of capital they have invested in the partnership. Essentially, a limited partnership can allow a partner to have limited liability and purely be an investor if several conditions are met. These include the requirement that at least one partner must have unlimited liability, the limited…

    • 562 Words
    • 3 Pages
    Good Essays
  • Satisfactory Essays

    Limited Liability Company (LLC) means that, the investors are only limited liable in case the business, the investors invested in, goes bankrupt. The creditors can only take what each investor has initially invested. The creditors must not take outside an investor’s investment, no personal monies that are not part of the investment.…

    • 337 Words
    • 2 Pages
    Satisfactory Essays
  • Good Essays

    Ratio Analysis Memo

    • 1026 Words
    • 5 Pages

    A limited liability company combines the attributes of a partnership with the limits on liability of a corporation. The profits and losses of the company still pass to the owners as in a partnership, but the losses can only offset other income up to the amount the individual invested. Formal action is not required to form a LLC, but articles of organization are filed with the proper state department. Management is still controlled by the owners.…

    • 1026 Words
    • 5 Pages
    Good Essays
  • Satisfactory Essays

    A corporation is a distinct legal entity that has rights that are not the same as the other members. An alternative kind of business is a Limited Liability Corporation. A Limited Liability Corporation “is a business structure allowed by state statute” (IRS, 2011). A Limited Liability Corporation in principle is a non-human unit. A Limited Liability Corporation is considered a combination of a corporation and a partnership as each owner has restricted personal liability for debts and each owner has the advantage of pass-through taxes. Limited Liability Corporations have to abide by specific rules depending on the state the business is filed. The proprietors of a Limited Liability Corporation are called…

    • 574 Words
    • 2 Pages
    Satisfactory Essays
  • Satisfactory Essays

    There are four main forms of business structures. The structures of business differentiate based on liability, tax implications, and what type of business is being evaluated when determining what structure to use. This paper will cover the advantages and disadvantages within the four types of business structures; Limited Liability Corporations, Corporations, Partnerships, and Sole Proprietorships.…

    • 642 Words
    • 3 Pages
    Satisfactory Essays
  • Good Essays

    IntroToBusinessQuestions

    • 2141 Words
    • 7 Pages

    =Limited partnerships and limited liability partnerships offer some of their owners limited personal liability for business debts, unlike general partnerships. Limited partnership is a partnership that consists of at least one general partner. A limited liability partnership doesn’t have a general partner.…

    • 2141 Words
    • 7 Pages
    Good Essays
  • Good Essays

    Limited Liability Corporation and limited liability partnership are two of several types of structures that individuals can give thought to forming when starting a business. To form a corporation each member has limited liability, but the corporation has full liability. Forming a partnership requires at least two people, which are called partners, and each partner has limited liability. This paper will describe the roles of Limited Liability Corporation (LLC) and Limited Liability Partnership (LLP). In addition, the paper will describe under what circumstance one would choose one instead of the other.…

    • 1018 Words
    • 5 Pages
    Good Essays
  • Good Essays

    Limited liability companies are those companies who have the form of the partnership, in which all the partners have the right to participate in management and have the limited liability for company debts.…

    • 1715 Words
    • 7 Pages
    Good Essays
  • Good Essays

    According Gitman (2009), to Limited partnerships is a partnership in which one or more partners have limited liability as long as at least one partner ( the general partner) has unlimited liability. In limited partnerships at least one of the owners is considered a general partner who makes business choices and is personally responsible for any debts the company might incur. Limited liabilities also have at least one limited partner who invests funds in the business but has a minimum control over day-to-day operations and decisions. Limited partners give financially to a company, for example; a LP might contribute $50,000 into a real estate partnership but cannot contribute as much too any activities in the business. Since LPs have no management control they have protection against personal liability. This basically means that a LP cannot be forced to use personal assets to pay off any company debts but a LP can lose the money invested in the business.…

    • 779 Words
    • 4 Pages
    Good Essays
  • Better Essays

    LLC and partnership

    • 843 Words
    • 4 Pages

    A limited liability company (LLC) is a flexible form of enterprise that blends elements of partnership and corporate structures. An LLC is not a corporation; it is a legal form of company that provides limited liability to its owners in the vast majority of United States jurisdictions.” (Wikipedia).…

    • 843 Words
    • 4 Pages
    Better Essays
  • Satisfactory Essays

    Accounting Words

    • 288 Words
    • 2 Pages

    Limited Liability Company: Entity where the business, and not the proprietor, is liable for the company’s debts.…

    • 288 Words
    • 2 Pages
    Satisfactory Essays
  • Good Essays

    A Limited Liability Company or LLC is a legal form of business organization with daily activities like a partnership but with limited liability similar to a corporation. An LLC is formed in the state in which it operates. An LLC is formed by filing Articles of Organization with the state in which you will be doing business. Limited liability companies (LLCs) are generally taxed as partnerships. Therefore, the LLC is not subject to income tax on its taxable income but such income is allocated to the members (owners) of the LLC..…

    • 1706 Words
    • 7 Pages
    Good Essays