Question

what are the positives an negativies of an(LLC) business compared to the other three?

Answer 1

INTRODUCTION-:

Limited liability company is a form of business structure whereby the members of the company cannot be held liable personally for the business debts of the company. These are generally hybrid entities that combine the features of a corporation and a partnership or a sole proprietorship. LLC can get all benefits like tax benefits, open bank account and do all business activities under its own name.

ADVANTAGES-:

1. TAX FLEXIBILITY-: members of the LLC get to determine how they want to be taxed.

2. LESS PAPERWORK-: compared to other forms less paperwor is involved in LLC. This makes the working easy and decisions can be taken quickly.

3. LIMITED LIABILITY-: LLC provide their members limited liability, they are not personally liable to the business debts. They provide shield to their members.

DISADVANTAGES-:

1. LIMITED LIFE-:

Generally when a member departs from LLC ,it comes to an end which is not the case with companies. Therefore the life of LLC is disturbed which results in revenue generation as well.

2. NO CLEAR ROLES-:

Like the corporation have proper roles distributed like the directors and managers, but this is not the case with LLC. This makes diffcult for the investors to know the person who is in charge of it. Though this confusion can be avoided by creating a LLC operating agreement.