A Brief Opening Of The Dirt Patch, Llc.

As a hybrid of partnerships and corporations, LLC’s provide limited liability for debts and flexibility to be taxed as a partnership or corporation (Staring and Naming a Business Presentation, 2012, Slide 5). Some specific advantages include being empowered authorities in the management of the business, diversity of members, limited liability, pass-through taxation, and less paperwork (appreciated by many). A drawback of this business structure is the need for a tailored operating agreement that specifies the specific needs of the

Limited company is an organisation in which allow you set up and run your business. Any profits which are made within a limited company stays within the company after it has paid corporation tax, which then allows the company to share its profits.

Limited liability means it does not exceed the amount invested in a partnership or limited liability company. The limited liability feature is one of the biggest advantages of investing in publicly listed companies. While a shareholder can participate wholly in the growth of a company, his or her liability is restricted to the

When looking at liability, creating an LLC will limit the owner’s exposure to just his invested amount. This will legally shield his home, bank accounts, family’s property and other personal assets from seizure or liquidation in the event the company is held responsible for any of the situations mentioned, such as a cabinet falling or subcontractor failing to perform. It would also protect him in the event the expansion of his company fails, and a worst case scenario of the company going under.

This allows each owner to protect personal assets from claims and lawsuits against the company. This limits the liability of each owner the amount that he or she has invested in the business. The LLC also has the option to choose your own tax situation. In addition, the ruling does not affect the personal finances of the owner as a sole proprietorship.

Liability: The name of this form of business accurately describes one of its greatest advantages: limited liability. LLC’s share the same limits of liability afforded to corporations. Our owners are limited in personal liability since the company and the owners are separate legal entities: just as in a corporation. However, each of our founding members is willing and able to assume personal liability for financial funding. Waiving the veil of financial liability protection is allowed under state LLC rules (Small Business - Chron.com, 2015)

Based on our learned and collected information from internet, we known different business organizations have different tax rate and policy. As we known, Hua and Lin decided to start a clothing business. In our team opinion, this company is classified as an limited liability company, which as an alternative to a general or limited partnership. First，this company has two person, an LLC has two or more members. The income of LLC is not taxed at the entity level but passes through to the member. The member of LLC only need to pay their personal income tax. While the LLC does not pay tax income. Compared with LLC, the closed corporate need to pay personal tax income and corporate tax income. This mean double tax. From this compare,we found the LLC has lower tax burden. So that, Hua and Lin choose the kind of LLC is very right.

The parties of an LLC have particular rights like voting decisions which impact the Limited Liability Company. The members of an LLC openly manage the firm and are likely to receive revenue allocations, tax remunerations as well as losses which are different from their membership interest. Members also have duties of trust which are sometimes called fiduciary duties. Several Limited Liability Companies are managed by its owners, and some are operated by managers. Members have a duty of loyalty to the entity (Fitzpatrick, 2018). Under the duty of loyalty, members have the responsibility of putting the achievement and benefits of the company above their advantages. Members ought to act honestly when dealing with the company and avoid any conflicting interests between the company goals and personal goals. A member is supposed not to take secret advantage of the business opportunities or hoard secret profits from the commercial activities of the company (Fitzpatrick, 2018). Members also have a duty of care, and they are required to act in a decent manner as well as exercise reasonable care in performing their duties. For instance, if your Limited Liability Company wants to purchase a piece of land, one is obliged to act responsibly and

Due to limited liability, company creditors’ interests are not protected . Creditors need to bear the risks inherent when dealing with limited company. Shareholders are discouraged from monitoring and controlling the business due to the benefits of limited liability.

LLC stands for limited liability company. An LLC is a legal form of a company that provides limited liability to it 's owners in many jurisdictions. The business structure of an LLC

The advantages of forming an LLC, as stated before, allow members to enjoy tax and liability protection.

What are the advantages and disadvantages of changing the company organization from a sole proprietorship to a LLC?

Firstly, even though there are different types of partnership such as general, limited and limited liability partnership. This three different type has its advantages and disadvantages however we will be mainly focused on general partnership. One advantage of the general partnership is raising capital due to the nature of the business the partners will raise capital to start-up the business. Therefore more partners mean more capital can be put to the business, this allows the business to have more potential for growth and profitability. Another advantage is that a partnership is less complicated to form and run than a company they don’t have legal filing requirements, this means they don’t have to file accounts and documents with Companies House.

The advantages to a LLC are: 1) Reduction of personal liability. A sole proprietor has unlimited liability, which can include the potential loss of all personal assets. 2) Taxes. Forming an LLC may mean that more expenses can be considered business expenses and be deducted from the company’s income. 3) Improved credibility. The business may have increased credibility in the business world compared to a sole proprietorship. 4) Ability to attract investment. Corporations, even LLCs, can raise capital through the sale of equity. 5) Continuous life. Sole proprietorships have a limited life,

If the business fails or loses a lawsuit, the general creditors cannot attach the owners’ homes, cars and other personal property. Limited liability is the one major reason so many businesses are incorporated.