Gloria Smithson Case Summary

A Limited Liability Company (LLC), as the name states, has the ability in keeping your liability limited as a professional owner. This is fundamental in protecting your personal assets by separating them from your business assets. In choosing to run a LLC company, we have agreed that a manager-managed business would be conducive to our field of industry. Although one person will have the authority in overseeing the daily tasks of running the business, all non-managing members will still have an input in all decisions in regards to the enterprise. Contract negotiations and employment are just a few of the joint duties of all members. Running an LLC has many advantages like flexibility, limited liability in business related debts, pass-through taxes, and reliability standing. However, with perks there are always some downfalls, such disadvantages consists of being subjected to self-employment tax or if a member departs the LLC ceases to exist, although an Operating Agreement can reverse this challenge. As you can see, running an LLC has more pros, out weighing the cons of such companies.

Forming an LLP begins with filing articles of partnership with the secretary of state of the state in which the LLP is organized. The LLP laws of the state where the LLP performs business govern the partnership. The partnership must follow the state laws and regulations to continue performing business in that state. Many states require an LLP to carry a minimum of $1,000,000 in liability insurance covering negligence, wrongful acts, or misconduct by partners or employees. Taxation of the LLP is the same as in a general partnership. Each partner is required to file their profits or losses on their personal income tax return. As with a general partnership, an LLP is required to file an information return with the government so the income or losses are traceable to the individual partners.

iA 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.

Each partner is responsible for any negligence made by himself or employees being under his direct supervision

Without a written agreement, partners are not paid a salary; instead they share profits equally (unless otherwise stated in agreement).

This memorandum outlines the various options available to the three persons in the establishment of their business. The memorandum recommends the use of the limited partnership (LP) as the most appropriate business model in the circumstances. This choice, as outlined in the memorandum herein, is informed by the special circumstances that the business is intended to be run and conducted.

Sole proprietorship was precluded because the business will be run by Monica and Susan because they have the necessary skills to be successful entrepreneurs. In this scenario, Vic will provide capital and will take a passive role in managing the business, she sill obtain profits because of her involvement in the business. For not facing some problems among them, they will have to reach an agreement generally written to state how shares will be handled; this is common called a limited partnership agreement. “This agreement sets forth the rights and duties of the general and limited partners; the terms and conditions regarding the operations, termination, and dissolution of the partnership; and so on” (Henry Cheeseman, 210, p. 547).

for short. A LLC is a legal form of a company that provides limited liability to its owners in many areas. The main characteristic an LLC shares with a corporation is limited liability, and the main characteristic it shares with a partnership is the accessibility of pass-through income taxation. It is every so often more flexible than a corporation, and it is complementary for businesses with a single owner.

The limited liability partnership (LLP) is another type of partnership. LLP is “a partnership consisting of one or more general partners and one or more limited partners” (p. 554). “It was created to limit the personal liability of the partners of "losing their personal assets to only their own acts and omissions and to the acts and omissions of people under their supervision” (Nickels, McHugh, & McHugh, 2013, p. 119). This business form also “allows a partnership to continue as a pass-through entity for tax purposes” (Miller, 2014, p. 554). However, limited liability partnership is not recognized as a legal business structure in every state, unlike the general partnership, In addition, taxing authorities in some states recognize the structure of LLP as a nonpartnership for tax purposes due to its special structure (Scott & Media, n.d.). There is also a limited partnership, which has one or more general partners and one or more limited partners. One partner will be a general partner and has unlimited liability and is active in managing the firm whereas the limited partner will only invest money in the business but does not have any management responsibility or liability for losses beyond the investment.

Beth, Sam, and their limited partners are doing well in their business and it is continuing to grow and prosper. Beth and Sam feel confident enough to move more in the direction of becoming a corporation, but yet feel they are not yet definite on corporation formation so in doing research they decide that they would move the company toward the formation of a Limited Liability company (LLC)

The last form of business structure to operate under is a Limited Liability Company (LLC). LLC’s are commonly referred to as the hybrid of business structures because they provide limited liability features of the corporation, they are tax efficient, and operate cohesively with partnerships. When forming an LLC there are three rules that must be followed which are: 1) it has to be different from already existing LLC’s in said state. 2) It has to indicate that it is in fact an LLC. 3) it is illegal to incorporate restricted words according to the state that the entrepreneur intends to operate in.

A limited liability company (LLC) is a business entity where the owners have limited personal liability for the debts

A partnership consisting of two or more persons, with at least one general partner and one limited partner Limited Liability Partnership (LLP) A partnership where the individual partner’s own liability is generally limited Company A business form which is a legal entity separate and distinct from its shareholders and directors Owned by One person Generally between 2 and 20 partners. A partnership of more than 20 partners must incorporate as a company under the

Now getting into the LLP (Limited Liability Partnership) has a few elements like partnerships and corporations but the advantage is that an LLP, one partner is not responsible or liable for another partner's misconduct or negligence. Usually LLP also makes it where you have at least one owner with a minimum of 1% more of the company than the other partners so you have one that has the final say so. Also, the in the late 80’s the LLP laws were passed to shield innocent members of these partnerships from liability. The disadvantage is that your not able to raise money or have angel investors in a LLP.

Reason for this can be explained as according to limited partnership there should be at least one general partner and one limited partner. General partner has an authority to manage the business and to operate or in other words general partner has a control on the business on the other hand limited partners should not participate in the business management as doing that would lose their protection of limited liability. They would be responsible for the debts and other liabilities equally if they would participate in the management